KATHMANDU, OCT 13: The Asian Development Bank (ADB) is investing a total of US $ 100 billion on climate financing to its developing member countries (DMCs).
At a program organized in Manila, Philippines on Wednesday, the multilateral lending institution said it will be expanding the investment amount starting from 2019 through 2030.
“The battle against climate change will be won or lost in Asia and the Pacific,” said ADB President Masatsugu Asakawa. “The climate crisis is worsening daily, prompting many to call for increased climate finance. We are taking action to meet this call by elevating our ambition to $100 billion in cumulative climate finance from our own resources by 2030.”
In 2018, ADB committed to ensuring at least 75% of the total number of its operations support climate action and its own climate finance resources reach at least a cumulative $80 billion by 2030. Today’s announcement elevates the ambition of this financing.
ADB expects the cumulative climate financing from its own resources in 2019–2021 to reach about $17 billion.
The expanded climate finance ambition is a key element of ADB’s efforts to support its DMCs. Facing the interconnected challenges of the coronavirus disease (COVID-19) pandemic and the climate crisis, many DMCs are taking bold action to promote a green, resilient, and inclusive recovery.
The additional $20 billion will provide support for the climate agenda in five main areas. These include avenues for climate mitigation, including energy storage, energy efficiency, and low-carbon transport. ADB expects its cumulative climate mitigation finance to reach $66 billion in this area.
Similarly, scale-up of transformative adaptation projects is another earmarked area. Projects in climate-sensitive sectors, such as urban, agriculture, and water, will be designed with a primary purpose of effective climate adaptation and enhanced resilience. ADB expects its cumulative adaptation finance to reach $34 billion.
The ADB will be pouring an additional $18 billion to $30 billion in private sector operations under the climate service. This includes creating more commercially viable projects for both ADB and private investors. The expansion will be underpinned by improvements in operational efficiencies, a post-pandemic recovery in market demand for financing, new technologies and innovations in climate financing, and new areas of business for private sector climate operations. ADB intends to support these initiatives with $12 billion in cumulative private sector climate finance from its own resources and anticipated crowding in of an additional $18 billion to $30 billion.
Support for a green, resilient, and inclusive recovery from COVID-19 is another area for investment. These include innovative financing platforms such as the ASEAN Catalytic Green Finance Facility and Green Recovery Platform, which are expected to leverage funds from capital markets and private sector investors for low-carbon infrastructure.
Similarly, the ADB looks for supporting advance reforms in DMCs to unlock actions through policy-based lending to support policies and institutions for enhanced climate resilience and climate mitigation.
Across these areas, ADB will continue to expand access to new, climate-focused technologies and mobilize private capital toward climate finance, reads a press release issued by the ADB.