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ADB aims to bring investors closer to green energy
SE ASIA
THE Asian Development Bank (ADB) and the Singaporean government-backed Infrastructure Asia fund are to create a new financing forum to drive more investment in green and sustainable infrastructure in South-East Asia.
The region needs to invest $210bn per year up till 2030 in order to fund the energy transi- tion and to create a sustainable economy, the two partners said.
To achieve this goal, they are about to launch the Innovative Finance Lab for Sustainable Infra- structure, a virtual space supported by a bian- nual event in Singapore, to gather stakeholders from across South-East Asia to exchange knowl- edge, improve their policy-making capacities, and foster the adoption of innovative and green finance models.
The Innovative Finance Lab will also serve as a capacity-building platform for the Association of Southeast Asian Nations’ (ASEAN) Catalytic Green Finance Facility (ACGF), which was launched in April 2019 and which aims to cata- lyse public and private capital to invest in green technology.
The ACGF is part of the Green and Inclusive Infrastructure Window, launched by South- East Asian governments, ADB and major development financiers under the ASEAN Infrastructure Fund, a regional financing ini- tiative established in 2011 that has committed $520mn for energy, transport, water and urban infrastructure projects across the subregion.
ADB Director-General for South-East Asia Ramesh Subramaniam and Infrastructure Asia Executive Director Seth Tan signed the deal at the Asia Infrastructure Forum in Singapore.
“We need innovative financing approaches to mitigate risks in projects and better leverage
public funds to catalyse more financing from pri- vate and institutional partners, support greener and cleaner development, and help solve critical development challenges,” said Subramaniam.
“Projects structured with better financial and technical elements, along with good partner- ships, are key to helping improve the bankability of Asia’s sustainable infrastructure projects,” said Tan.
“Through this collaboration with ADB, Infra- structure Asia will work in close consultation with the international financing, credit enhance- ment and technology ecosystem in Singapore to improve municipalities and state-owned enter- prises’ access to private capital.”
The agreement is especially aimed at state- owned enterprises and regional and municipal governments to improve their institutional, financial and governance capacities for develop- ing green infrastructure.
ACGF aims to mobilise around $1.bn from a number of sources, including the ASEAN Infra- structure Fund, ADB, German development bank KfW, the European Investment Bank (EIB), the Republic of Korea and Agence Française de Développement.
The facility is also supported by the Organ- isation for Economic Co-operation and Devel- opment (EOCD), the Global Green Growth Institute, and the Overseas Private Investment Corporation.
ADB is committed to achieving a prosperous, inclusive, resilient and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, the ADB made com- mitments for new loans and grants amounting to $21.6bn in a bid to boost sustainability and resilience in Asia and the Pacific.
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