At Waterfall, we firmly believe that finance is the engine driving the energy transition. Over the past year, we’ve worked tirelessly to improve transparency, create commercial pathways, and manage risk – all with the goal of making bold ideas bankable and scaling transformative climate solutions to new heights.

To this end, Waterfall made significant strides, and I am proud of our team for pioneering efforts including:

• - Our self-service toolkits: Empowering project developers with guided workflows for approval pathways, contracting models, and funding options.
• - Innovative capital investment: Designing, marketing, and transacting across cutting-edge technologies.
• - Alternative risk models: Combining financial and sustainability metrics to better assess the value and impact of transition projects.

We’ve learned valuable lessons about the perceived and actual complexities of finance, the trust deficit< in established systems, and the need for a mindset shift in how deals are structured and capital is deployed across the entire climate ecosystem.

None of this would have been possible without the continuous engagement from climate hardware companies, banks, public and private equity, lawyers, accountants, and insurance firms that have worked side-by-side with us and let us into their businesses and transactions. Thank you.

Reflecting on 2024

When we started addressing the financing gap for early-stage climate solutions, we expected to tackle micro-level challenges such as due diligence or risk assessment.

However, we discovered that larger macroeconomic questions - the right type of capital, the future of industrial decarbonization, and Asia Pacific’s role in the global energy transition - were the dominant forces in need of solutions.

Let me unpack these further:

1. The right kind of capital
How do we ensure that funding aligns with the needs of early-stage innovators and large-scale industries alike?

Public funding for climate technologies surged in 2024, driven by the US Inflation Reduction Act and national efforts to secure sovereign capabilities. While this has sparked investment and de-risking in some sectors, for us it raised the question of whether the right type of capital is funding the transition.

In markets like Australia, heavy investment in de-risked solutions is crowding out private capital for early-stage innovations, while traditional venture funding also appears ill-suited to company growth needs. A focus on capital volume over risk reduction has limited the impact of blended and concessional funding programs to bridge this gap.

For capital-intensive climate startups, this means it's often not the best technology that wins, but the ones that can leverage partnerships to achieve growth. For policy-makers and investors, there is a clear need to deploy better financing mechanisms that address uncertainty and boost local investor confidence. Insurance and guarantees, for example, remain critically missing, reducing the entry of traditional finance into the sector at earlier stages.

2. The future of industrial decarbonization
What role needs to be played in accelerating industrial decarbonization in hard-to-abate sectors?

Businesses globally have noticeably shifted their strategy to solutions that are measurable and cost-effective; moving from mere compliance to results-driven execution. This is leading to renewed scrutiny on technologies that are truly additional to emissions reductions while supporting corporate growth plans.

The AI boom is evidence of this, with technology corporations driving massive funding flows into engineered carbon removals. The Asia Pacific AI market, growing at over 40% annually, illustrates the scale of opportunity. This surge in technology adoption has ripple effects, from the expansion of data centres and increased electricity demand to the pressing need for 24/7 reliable clean energy. Tech companies are leading the way in a new wave of solutions- including nuclear power — valued for its reliability and zero emissions despite its higher costs.

We expect this to lead to fewer but better solutions scaling impact in the coming years. This may also undermine the case for more early-stage technology innovations and presage a shift back to large-scale, industrialised projects built on strategic partnerships.

3. Asia Pacific’s role
How can we leverage this region’s unique position to lead the global energy transition?

Asia Pacific occupies a pivotal position in the global energy transition. As the world's factory, home to the largest share of global population, and a key source of natural resources, the region is where decarbonization, industrial transformation and capacity development converge.

Despite its importance, the region has often been overshadowed by the United States’ policy incentives and the European Union’s regulatory frameworks. This underinvestment represents a missed opportunity, but the landscape is rapidly changing.

A growing pragmatism is shaping decarbonization efforts. Governments and corporations are increasingly collaborating to build local capabilities, enhance efficiencies and secure competitive advantages in the global economy. Investors are responding by channelling more targeted resources into joint ventures and large cross-border projects, fostering an exciting environment for innovation and scalability.

This evolution underscores the need for mechanisms that bridge high-potential innovations with established industry leaders. By fostering collaboration between startups, innovators, and incumbents, the Asia Pacific can position itself as a powerhouse for deploying and scaling breakthrough technologies, ensuring a decisive contribution to the global energy transition.

Looking ahead
As we approach 2025, we’ve reflected deeply on our role – where can we make the greatest impact?

The answer lies in aligning our unique strengths with the pivotal macroeconomic questions that need solving to deliver the energy transition.

Our strengths
Commodities expertise anchored in energy transition:

Our team’s extensive experience in commodities serves as a cornerstone. The metals, biomass, minerals, and molecules driving the energy transition require focused attention within the broader climate agenda. The Asia Pacific region, with its sustained industrial and economic growth, continues to be a key area of engagement.

Structured finance pioneers:

As structured finance experts, we understand the critical importance of refining project contracts and offtake mechanisms to de-risk climate solutions. Our deep project finance knowledge equips us to scale impactful initiatives - building bigger and better solutions for the challenges ahead.

Specialised focus:

Over the past year, we’ve dedicated substantial resources to servicing both engineered and nature-based carbon solutions. While both areas remain essential to addressing the climate crisis, we will be concentrating our efforts on engineered solutions, where we can leverage our expertise to have a multiplier effect on the required learning curves and cost. By focusing here, we aim to deliver measurable results and drive capital into the technologies that can transform the carbon landscape at scale.

Building partnerships:

A fragmented landscape of climate solutions often leads to decision paralysis and delays progress. We see immense value in aggregation to create a higher-quality market – partnering to bring together the best technologies and most suitable users to build robust, scalable solutions over scattered initiatives. By creating a higher-quality market, we can streamline decision-making and maximize impact.

Introducing Tegro Commodity Partners

Tegro Commodity Partners embodies our commitment to addressing the challenges and opportunities of 2025, leveraging the collective strengths of our team to drive systemic change.

Our name Tegro is built on the values of:

• - Integrity: Supporting solutions that can be measured and managed effectively for sustained impact.
• - Technology: A belief in technology innovation to build the large-scale solutions we need.
• - Growth: Recognising the need for projects to deliver economic growth.

Tegro is dedicated to solving for hard-to-abate sectors including aviation, transport, metals, mining, chemicals, and fuels. By focusing on high-impact, scalable solutions, Tegro aims to:

• - Accelerate industry-wide transformation through sustainable fuels, critical resources, and carbon markets.
• - Leverage Waterfall’s structured finance expertise to de-risk projects and drive investment.
• - Build sector-focused investment platforms and tools to de-risk and deploy capital more efficiently.

We are committed to pragmatic action, working closely with corporations and asset managers to transition safely and securely within their risk parameters. By deploying capital strategically, we aim to drive meaningful decarbonization and measurable risk-adjusted outcomes.

Our decision to centralize operations in Singapore reflects our commitment to supporting sovereign capability development, cross-border supply chains, and regional adaptation efforts. By bringing the Waterfall Platform in-house, we will enhance our ability to deliver data-driven solutions that empower our clients to achieve their goals.

A call to collaborate

As we step into 2025, we are excited to expand our partnerships across the APAC region, including Singapore, Japan, Hong Kong, and Malaysia, with organizations and investors tackling decarbonization challenges in established industries.

We invite you to introduce us to like-minded individuals and companies within your network. Let’s start the conversation over coffee and explore how we can work together.

Recognizing the importance of aggregation and consolidation, we are prioritizing the development of platforms and financial instruments typical of capital markets but underutilized in climate innovation. Examples of our new projects include:

• - Tegro Carbon Platform: A tailored operating platform that will solve for risk, volume, and scale issues between carbon credit buyers and project developers.
• - Sustainable Aviation Fuel (SAF) Facility: A novel funding facility and insurance wrap with the aim to de-risk and catalyze capital into the SAF industry in Southeast Asia alongside industry and blended finance partners.

If you’d like to learn more or explore opportunities to collaborate, please reach out.

Thank you again for your trust and partnership in 2024. Together, we can deliver meaningful industrial evolution and decarbonization.

Warm regards,
Joe