Japan on Monday pledged to offer $10 billion financial aid for decarbonisation projects in Asia, such as renewable energy, energy-saving and conversion to gas-fired power generation from coal-fired power to help with an energy transition.

In a virtual meeting with ASEAN energy ministers, Japan’s Minster of Economy, Trade and Industry Hiroshi Kajiyama proposed various support measures for the region, including helping each country set a realistic path towards carbon neutrality and develop a roadmap to achieve it.

“We propose the Asian Energy Transition Initiative as a package of Japanese support for realistic transitions in Asia towards carbon neutrality,” Kajiyama told the meeting, in which 10 ASEAN countries participated.

The financial support, including lending and investments from the Japanese public and private sector, will target projects to help cut carbon emissions and contribute to each country’s carbon neutral target, Takeshi Soda, director for International affairs at the industry ministry, said.

These projects will include building gas-fired power stations and liquefied natural gas (LNG) receiving terminals as natural gas is considered an alternative to coal and a key transition fuel, he told Reuters by phone.

“There has been a rapid progress in divestment in fossil fuel projects in the international finance industry,” Soda said.

“But to achieve carbon neutrality in ASEAN, it is important to create a mechanism to attract investment and financing for a variety of projects and technologies that contribute to an energy transition,” he said.