The Asian Development Bank (ADB) is aiming to deliver $100 billion in climate financing to its developing member countries (DMCs) from 2019 to 2030.
“The battle against climate change will be won or lost in Asia and the Pacific,” ADB president Masatsugu Asakawa said.
“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 available through 2030 reach a cumulative $80 billion.
Wednesday’s announcement elevates the ambition of this financing and ADB expects cumulative climate financing from its own resources for 2019–2021 to reach about $17 billion.
The additional $20 billion will provide support for the climate agenda in five key areas such as new avenues for climate mitigation, including energy storage, energy efficiency, and low-carbon transport. ADB expects its cumulative climate mitigation finance to reach $66 billion.
Projects in climate-sensitive sectors including urban, agriculture and water, will be designed with a primary purpose of effective climate adaptation and enhanced resilience.
Thirdly, there will be an increase in climate finance in ADB’s private sector partnership operations.
ADB said it 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.
Innovative financing platforms
There will also be support for a green, resilient and inclusive recovery from Covid-19, including through 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.
ADB said there will be support to advance reforms in DMCs to unlock actions through policy-based lending to support policies and institutions for enhanced climate resilience and climate mitigation.
Established in 1966, ADB is owned by 68 members, including 49 from the region.
All of the DMCs are eligible for funding except those that have graduated from regular ADB assistance.
The bank explained that it determines the eligibility of DMCs to borrow from ordinary capital resources (OCR) at near-market terms, or at concessional OCR loan terms, or to receive grants from the Asian Development Fund.
DMCs are classified based on their gross national income per capita and creditworthiness, in accordance with ADB’s classification and graduation policy.