COP26: ADB announces US$665 million programme to aid green recovery in ASEAN

Four partners have collectively pledged US$665 million toward a platform managed by the Asian Development Bank (ADB) that aims to mobilise an additional US$7 billion for low-carbon and climate-resilient infrastructure projects in Southeast Asia and accelerate the region’s recovery from COVID-19.

The funding, which was announced at the 26th Conference of the Parties (COP26) in Glasgow, the UK, includes GBP110 million (US$151 million) from the UK Government, EUR132 million (US$155 million) from Italian state lender Cassa Depositi e Prestiti (CDP), EUR50 million from the European Union (EU), and US$300 million from the Green Climate Fund.

The partnerships will be part of a new Green Recovery Platform to support the Association of Southeast Asian Nations (ASEAN) Catalytic Green Finance Facility (ACGF), which was established by the ASEAN Infrastructure Fund and is managed by ADB.

“ASEAN countries have a unique opportunity to build a green and inclusive future after the COVID-19 pandemic,” said ADB President Masatsugu Asakawa, who attended the launch event with ministers and senior officials from ASEAN and partner countries. “The ASEAN Green Recovery Platform will help accelerate the flow of investments to support climate-resilient, environmentally sustainable infrastructure projects in Southeast Asia and boost sustainable, equitable development.”

The new funding will add to the US$1.4 billion in co-financing commitments already pledged to the ACGF since 2019, bringing total pledges to the facility to US$2 billion. The original financing partners supporting ACGF include ADB, Agence Française de Développement (AFD), the European Investment Bank, the German state-owned development bank KfW, and the Government of the Republic of Korea. Director General for International Partnerships at the European Commission Koen Doens, Executive Director of the Green Climate Fund Yannick Glemarec, and AFD Chief Executive Officer Remy Riouxalso spoke at the launch.

“This year, the UK became ASEAN’s first new Dialogue Partner in 25 years. We’re now working together to build stronger economic and investment relationships and tackle climate change.” said UK Foreign Secretary Elizabeth Truss. “The GBP110 million of UK funding for the UK-ASEAN Catalytic Green Finance Facility Trust Fund will help deliver clean, honest and reliable infrastructure into countries that urgently need it, drawing on UK expertise on green technologies and creating jobs across the UK.”

The COVID-19 pandemic has had significant economic, health, and social impacts in Southeast Asia. The platform will provide financing and technical assistance to reduce investment risks and catalyse public and private financing for green infrastructure projects that create jobs and bolster growth. It will also support the efforts of ASEAN developing member countries to reach their climate goals under the Paris Agreement and help them strengthen green capital markets, such as by expanding the issuance of green and climate bonds.

The ASEAN Green Recovery Platform forms part of ADB’s commitment to raising its ambition for 2019–2030 cumulative climate financing to US$100 billion, while ensuring that at least 75 percent of projects will address climate change mitigation and adaptation by 2030.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members, including 49 from the region.