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2024 predictions: Blended finance to grow bigger in Asia | ESG | AsianInvestor

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2024 predictions: Blended finance to grow bigger in Asia | ESG | AsianInvestor

This is a four-part series of thematic predictions for 2024. This is the fourth story.

Blended finance is poised to gain a lot more traction in Asia as a means of driving private investment toward sustainable development goals, if key challenges around awareness, policy incentives, and aggregating deals to mobilise capital at scale can be addressed.

Anthony Gao,
Pictect Wealth Management

In Asia, where blended finance is still a relatively new approach for philanthropic capital, Pictet Wealth Management’s Asia head of philanthropy services, Anthony Gao, expects to see more adoption in proof-of-concept pilots and in the project-preparation stage.

“Public sector funding will continue to play a significant role in shaping and driving the adoption,” Gao told AsianInvestor.

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Over the past few years, Asia has seen some adoption by philanthropic capital not only in the climate space, but also on social topics like education and health, especially in South Asia and Southeast Asia, said Gao.

There has also been a large uptick in the number of development finance institutions convening to focus on the topic, and strong interest among key stakeholders such as philanthropists, family offices, and commercial financial institutions.

“Asia has the highest concentrations of middle-income countries, where significant social and environment impact can be achieved with a manageable level of risk, and we should be able to see much more upside in the region with the right support and incentives,” said Gao.

With the ability to channel and coordinate efforts to address key challenges, blended finance has the potential to grow exponentially in Asia to meet the region’s substantial sustainable development funding needs, he said.

AWARENESS AND INCENTIVES

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Unlocking blended finance’s potential at scale requires new levels of collaboration between public, private and philanthropic partners.

With rapid growth in the number of impact-focused investors, Gao sees education and policy barriers as key obstacles to tapping the massive potential of blended finance. The role of governments in key economies will also be critical to the model’s success.

“We need to raise awareness, through more education and sharing of best practices,” said Gao. “Governments must also introduce targeted incentives enabling blended finance and remove obstacles in order to allow participants to make return-generating financial investments.”

Also read: CDPQ Asia head: Blended finance’s big potential for EMs

Fragmented deals and instruments remain a barrier to large-scale institutional investment.

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“Development finance institutions and the commercial ones should do more aggregating of blended finance projects, to address the challenges of attracting investment capital due to the size,” said Gao.

NO STANDARD SOLUTIONS

Blended finance solutions must correspond to local investor types, policy environments, time horizons and asset classes, according to Ou Yong Xuan Sheng, an ESG and green bond analyst at BNP Paribas Asset Management, who believes one-size-fits-all approaches are unlikely to succeed.

In Asia, the main challenge addressed by blended finance is the high cost of capital for projects in the emerging and frontier markets, he said.

Ou Yong Xuan Sheng,
BNPPAM

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“We can think about Vietnam, Laos, Cambodia as examples of markets where cost of capital is prohibitive for projects. These markets are also in great need for sustainable infrastructure as these markets grow and develop to avoid locking in polluting infrastructure,” Ou Yong told AsianInvestor.

Blended finance could also help finance the early decommissioning of coal related assets, where capital is required to fund both the opportunity cost of early retirement and the operation of the assets until they are offline.

“Opportunity costs are usually a thought exercise but in early retirement, it becomes actual costs to existing investors of the assets who now have to cut short the investment payback timeline,” said Ou Yong.

“We don’t think there is any standard framework for risk-sharing instruments because it will have to be crafted and designed for individual situations—types of existing investors, types of public capital available, timeframes, type of assets, etc. In other words, it can be difficult to scale blended finance as a standard product or vehicle.”

MEASURING SUCCESS

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Gao asserted that the true measure of blended finance’s efficacy hinges on leverage, additionality, and sustainability.

“Leverage refers to the ability to catalyse a multiplier effect by drawing in commercial investment,” he explained. “Additionality is about remedying market shortcomings or introducing financial instruments that have been scarce. Sustainability entails producing significant risk-adjusted returns in order to maintain the flow of investment capital.”

While Gao acknowledged the common metrics for assessing impact, such as the reduction of greenhouse gas emissions and job creation, he advocated for a more region-specific approach.

“It will be helpful for Asian stakeholders to refine and adopt clearer taxonomy and standards based on Asian context,” he said.

¬ Haymarket Media Limited. All rights reserved.

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Oregon Legislature passes controversial campaign finance changes

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Oregon Legislature passes controversial campaign finance changes
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Legislators passed a bill March 5 to modify forthcoming changes to Oregon’s campaign finance system despite outcry from good government groups who say the bill creates new loopholes.

Those groups were key in creating House Bill 4024, which was created and passed in 2024 in place of warring ballot measures seeking to overhaul the system.

That legislation included new limits on contributions, including capping individual spending on statewide candidates each cycle at $3,300, and other changes. Parts of the bill were set to go into effect in 2027 and 2028.

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Under the new proposal, House Bill 4018, the limits would still begin in 2027, but disclosure requirements and penalties would be pushed to 2031. It also gives the Secretary of State money to update the campaign finance system, but far less than the office previously thought it might need.

Representatives voted 39-19 to pass the bill. A few hours later, the Senate passed it 20-9.

Fourteen of the “no” votes in the House were Democrats, including Reps. Tom Andersen, D-Salem, and Lesly Muñoz, D-Woodburn.

Muñoz told the Statesman Journal she voted against the bill after hearing from people upset with the bill’s process.

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Six Democratic senators cast a “no” vote on HB 4018.

Oregon campaign finance reform advocates say they were left out of negotiations

After working together in 2024, advocates said Speaker of the House Julie Fahey, D-Eugene, “ghosted” them.

Good government groups said the bill does far more than address necessary technical fixes to HB 4024.

HB 4018 is “a complete betrayal of the deal that was made two years ago,” Norman Turrill of Oregon’s League of Women Voters said.

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Should the bill be signed by Gov. Tina Kotek, the groups said they will push their own changes through a 2028 ballot initiative.

Those advocates have outlined at least 11 different changes they believe the bill creates. The bill’s contents were first shared through a Feb. 9 amendment that was posted after 5 p.m., hours before it received a public hearing in an 8 a.m. work session on Feb. 10 and later, Feb. 12.

Secretary of State Tobias Read told legislators in January his office was requesting $25 million as a placeholder to fund a new campaign finance system for the state. Read was not secretary of state when House Bill 2024 was passed and his office is now working to implement the bill’s changes on a fast approaching deadline.

An additional amendment to the bill instead gives the Secretary of State’s Office $1.5 million for staff, some of whom would be tasked with updating the state’s current system.

House members agreed March 4 to send the bill back to committee, presumably to be amended. A 5 p.m. committee meeting was canceled about an hour after initially being announced.

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A work session on HB 4018 was moved to the next morning. After an hour of delay, legislators convened and finished the meeting, moving the bill back to the floor without any changes, in less than three minutes.

A new campaign finance bill, Senate Bill 1502, was introduced and scheduled for a public hearing and work session March 4.

The bill is “very simple,” Senate Minority Leader Bruce Starr, R-Dundee, said. It tells the Secretary of State’s Office to draft a bill for the 2027 session with necessary campaign finance improvements from HB 4024 and HB 4018.

Three senators voted against the bill March 5. It now moves to the House. Legislators have a March 8 deadline to end the session.

“SB 1502 would not correct the severe damage to campaign finance reform that will occur, if HB 4018 B is enacted in this session,” Dan Meek of Honest Elections Oregon wrote in submitted testimony.

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Lawmakers appear unsatisfied, but supportive, toward Oregon campaign finance bill

House Majority Leader Ben Bowman, D-Tigard, said HB 4018 made positive changes but acknowledged it was “a challenging vote for many of us.”

“We are implementing this whole new system that is new for all of us, and there are a lot of opinions and there are a lot of details to figure out,” House Minority Leader Lucetta Elmer, R-McMinnville, said. Elmer and Bowman carried the bill in the House. “With that being said, we’re moving forward in good faith, knowing that we’ll also be coming back next year to make sure that those details and all those kinks are worked out.”

Rep. Mark Gamba, D-Milwaukie, said he was concerned about the bill and the “non-inclusive process” that led to it.

Gamba pointed to a letter from the Washington, D.C.-based Campaign Legal Center that states in part that the bill “would substantially revise critical campaign finance reforms enacted two years ago in Oregon” and weaken the state’s campaign finance law.

The current bill is not the only possibility for moving forward, Sen. Jeff Golden, D-Ashland, told lawmakers. Proposed amendments that would have extended implementation timelines without the additional changes were ignored, he said.

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“House Bill 4024 and this bill, 4018, have two things in common. One, they were thrown together in a few days behind closed doors, mostly by organizations who dominate campaign funding in the current system,” Golden said. “And two, very few legislators understand what is actually in these bills.”

He urged lawmakers to abandon the system created in House Bill 4024 as an “uncomfortably expensive learning experience” and develop a new plan based on successful programs in other states.

Sen. Sara Gelser Blouin, D-Corvallis, also spoke against the bill on the Senate floor.

“The concern that I had and that my constituents had was technical changes are one thing, but it should not be increasing the amount of money that candidates can take in or hold or carry over,” Gelser Blouin said. “Unfortunately, as it’s drafted, this bill does all of those things.”

HB 4024 is too complicated and “unimplementable” without the fixes in HB 4018, Starr said.

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Sen. Lew Frederick, D-Portland, agreed, saying HB 4018 and SB 1502 give reassurance about a system he has concerns about.

“If there were no cameras and the lights were off, I think most people would agree this is not the bill we want,” Rep. Paul Evans, D-Monmouth, said.

Some lawmakers expressed similar feelings of discontentment with the bill in Ways and Means and one of its subcommittees on March 3, but said they felt it was important to make some progress on the issue. Discussions could happen again in 2027, they said.

Rep. Nancy Nathanson, D-Eugene, who ultimately voted in favor of the bill, said March 3 supporting it “is a very painful choice to make.”

Statesman Journal reporter Dianne Lugo contributed to this report.

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Anastasia Mason covers state government for the Statesman Journal. Reach her at acmason@statesmanjournal.com or 971-208-5615.

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Paramount ally RedBird says using Middle East money to help buy Warner Bros. could be a good idea

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Paramount ally RedBird says using Middle East money to help buy Warner Bros. could be a good idea

  • Last year, Paramount said it would use $24 billion in funding from Saudi Arabia, Abu Dhabi, and Qatar to help buy WBD.
  • Now that Paramount has won that deal, it won’t say whether that’s still the plan.
  • A key Paramount backer suggests that Gulf money would be a good thing for this deal.

We still don’t know if Paramount intends to use billions of dollars from Gulf states like Saudi Arabia to help it buy Warner Bros. Discovery.

But if Paramount does end up doing that, it wouldn’t be a bad thing, says a key Paramount backer.

That update comes via Gerry Cardinale, who heads up RedBird Capital Partners, the private equity company that helped finance Larry and David Ellison’s acquisition of Paramount last year and is doing the same with their WBD deal now.

In a podcast with Puck’s Matt Belloni published Wednesday night, Cardinale wouldn’t comment directly on Paramount’s previously disclosed plans to use $24 billion from sovereign wealth funds controlled by Saudi Arabia, Abu Dhabi, and Qatar to help buy WBD.

Instead, he reiterated Paramount’s current messaging on the deal’s financing: The $47 billion in equity Paramount will use to buy WBD will be “backstopped” by the Ellison family and RedBird — meaning they are ultimately on the hook to pay up. The rest of the $81 billion deal will be financed with debt.

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Cardinale also acknowledged what Paramount has disclosed in its current disclosure documents: It intends to sell portions of that $47 billion commitment to other investors: “We haven’t syndicated anything at this time,” he said. “We do expect to syndicate with strategic, domestic, and foreign investors. But at the end of the day, that alchemy shouldn’t matter because it’ll be done in the right way.”

And when asked about concerns about Middle Eastern countries owning part of a media conglomerate that includes assets like CNN, Cardinale suggested that could be a plus.

“I think we want to be a global company,” he said. “You look at what’s going on right now geopolitically. What’s going on right now geopolitically out of the Middle East wouldn’t be, the positives of that would not be happening without some of those sovereigns that you’re referring to.”

He continued:

“The world is changing. We can stick our head in the sand and pretend it’s not, or we can embrace globalization and the derivative benefits both geopolitically and otherwise that come from that. Content generation coming out of Hollywood is one of America’s greatest exports.
I firmly embrace the global nature and orientation that we bring to this from a capital standpoint, from a footprint standpoint, etc. At the end of the day, I do understand some of the concerns that you’ve raised, but that will work itself out between signing and closing because at the end of the day, worst-case scenario, Ellison and RedBird are 100% of this thing.”

All of which suggests to me that Paramount still intends to use money from Gulf-based sovereign wealth funds to buy WBD.

What I don’t understand is why the company won’t say that out loud. Does that mean it’s still negotiating with potential investors? Or that it’s reticent to disclose outside investors, for whatever reason, until it has to? A Paramount rep declined to comment.

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Crypto bill hits new impasse, raising doubts over its future

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Crypto bill hits new impasse, raising doubts over its future
Talks on landmark crypto legislation have hit a new impasse after banks said they could not back a compromise pushed by the White House, a development that cast doubt on whether the bill will pass this year and sparked criticism from President Donald Trump ​who accused lenders of trying to undermine it.
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