Singaporean financial service group Oversea-Chinese Banking Corp. (OCBC) has partnered with Japan’s investment firm Mercuria Holdings to create a fund of up to $500 million to finance decarbonization-related businesses in Southeast Asia.
According to the statement, the credit fund will provide debt to projects and businesses anticipated to improve sustainability in Asia including decarbonization. They will begin raising money in early 2024, soliciting financial institutions and companies in Japan and Southeast Asia.
The activities undertaken through the partnership with OCBC are expected to be in line with the Asia Zero Emission Community (AZEC) concept advocated by the Japanese government. The AZEC initiative, announced in 2022, aims to encourage collaboration among Asian countries in advancing decarbonization efforts.
MOU signing ceremony at the AZEC Summit. (Photo: Mercuria Holdings)
As business and technological alliances that lead to the AZEC concept are being formed among several companies, OCBC and Mercuria aim to provide financial support to improve sustainability in ASEAN, including the realization of carbon neutrality.
In response to the changes in the macro environment, Mercuria said new projects, including renewable energy-related projects, are being developed in the Asian region, and the associated financing needs are increasing.
Established in 2005, Mercuria invests in businesses and real estate, with offices located in Japan, Beijing, Hong Kong, Thailand and Vietnam. Among its shareholders are the DBJ and Japanese trading house Itochu. Mercuria expects that its fund, activities, and the platform will bolster business ecosystem that includes Japan and ASEAN.
OCBC is the longest established Singapore bank, formed in 1932 throguh the merger of three local banks, the oldest of which was founded in 1912. It is the second largest financial services group in Southeast Asia by assets.
The group’s primary markets are Singapore, Malaysia, Indonesia and Greater China. It has over 410 branches and representative offices in 19 countries and regions.
(Image: Mercuria Holdings)