Government of Japan pledges $25 million for Energy Transition Mechanism
Following the launch of the Energy Transition Mechanism (ETM) on 3 November, the Government of Japan (GOJ) announced a grant of $25 million toward the Energy Transition Mechanism (ETM) partnership led by ADB. Vice-Minister for International Affairs at the Ministry of Finance of Japan Masato Kanda made the announcement.
GOJ’s grant is the first seed financing to be announced for ETM, the platform that will bolster transition from fossil-fuel in the region that is being studied and piloted in Southeast Asia, starting with Indonesia and the Philippines.
ETM is a transformative, blended-finance approach that seeks to retire existing coal-fired power plants on an accelerated schedule and replace them with clean power capacity. The mechanism will comprise two multibillion-dollar funds: one devoted to early retirement or repurposing of coal-fired power plants on an accelerated timeline, and the other focused on new clean energy investments in generation, storage, and grid upgrades. It is envisioned that multilateral banks, private institutional investors, philanthropic contributions, and long-term investors will provide capital for ETM.