The Green Climate Fund (GCF) has allocated $300 million to support the Asian Development Bank’s (ADB) First Green Recovery Program in Southeast Asia, the multilateral agency said in a statement yesterday.
The Association of Southeast Asian Nations (Asean) Catalytic Green Finance Facility (ACGF) Green Recovery Program aims to leverage GCF and ADB funds to catalyze financing from development partners and private capital sources to support more than $4 billion worth of green infrastructure projects across the region. All projects supported by the program will incorporate innovative green finance instruments and approaches.
ADB said it will prioritize the use of GCF funding under the program for investment projects in the Philippines, Cambodia, Indonesia and the Lao People’s Democratic Republic.
“The ACGF Green Recovery Program is designed to kickstart a cycle of low-emissions investments during the first few years of a COVID-19 recovery,” Ahmed Saeed, ADB vice president, said.
“The program will help Southeast Asian countries design green stimulus packages and projects that will create climate-friendly jobs, boost economic growth, and help countries fulfill their pledges under the Paris Agreement to reduce greenhouse gas emissions,” it added.
ADB said that the Green Recovery Program will be implemented according to the principles of ACGF, established by the Asean Infrastructure Fund and managed by ADB. ACGF has published a set of green investment principles and eligibility criteria and created a pipeline of projects, including its first project approved for financing in 2020.
ACGF has attracted more than $1.4 billion in cofinancing commitments, which will support the Green Recovery Program, the multilateral agency said.
ADB said the program aims to help Southeast Asian countries bridge a major gap in financing green infrastructure, with the region’s annual investment needs estimated to be $210 billion even before the COVID-19 pandemic hit. The gap is likely to have widened during the pandemic, as the region’s economy contracted by 4.4 percent in 2020, according to ADB.
The Green Recovery Program will provide technical assistance and concessional loans to about 20 green infrastructure projects across Southeast Asia. Over a 30-year period, the projects are expected to reduce carbon dioxide emissions by 119 million tons and create 340,000 green jobs in key sectors such as sustainable transport, renewable energy and energy efficiency systems, as well as low-carbon agriculture and natural resources.
“The program seeks to accelerate the flow of green capital from banks, investors, and capital markets to Southeast Asia by helping de-risk and prepare bankable green infrastructure investments,” said ADB’s ACGF unit head Anouj Mehta.
“The program will also help countries scale up issuances of green and climate bonds to support sustainable growth in developing Southeast Asia,” Mehta added. – Angela Celis