The Asian Development Bank (ADB) [ATB:AU] announced that it will provide an additional USD15bn in funding for emerging markets to tackle climate change under a new, faster lending model, as reported by Nikkei Asia on April 14. Under this model, advanced economies will provide USD3bn in guarantees, allowing ADB to offer loans worth five times that amount. This marks the first time that ADB will be using government guarantees in this manner. ADB hopes that the success of this leveraged climate finance model will encourage other development banks to follow suit. Furthermore, ADB called on private-sector banks and others to join forces to invest more in decarbonization projects.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific (APAC). The bank committed USD7.11bn in climate finance in 2022, with USD4.28bn allocated for climate change mitigation and USD2.83bn for climate change adaptation. The bank’s climate financing goals for the 2019-2030 period are set at USD100bn to meet the vast demand for capital for climate projects in developing nations. One of the primary objectives of ADB’s climate financing is to facilitate the transition to renewable energy and away from coal-fired power plants, which are mainly concentrated in the APAC region. On April 14, ADB and the Global Energy Alliance for People and Planet (GEAPP) announced a new capital fund to accelerate clean energy access and transitions in countries across South and Southeast Asia. GEAPP will provide an initial USD35m of catalytic capital towards the fund, which will be established and administered by ADB.