The Asian Development Bank (ADB) has announced it is elevating its ambition to deliver climate financing to its developing member countries (DMCs) to $100 billion from 2019-2030.
ADB President Masatsugu Asakawa said the battle against climate change will be won or lost in Asia and the Pacific, according to a statement issued on Wednesday. He 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,” he further said.
In 2018, the 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. The 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.
First, 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.
Second, a scale-up of transformative adaptation projects. 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.
Third, an increase in climate finance in ADB’s private sector operations. 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.
Fourth, 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.
Fifth, 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. Across these areas, the ADB will continue to expand access to new, climate-focused technologies and mobilise private capital toward climate finance.