The Asian Development Bank (ADB) and the UK Government have signed a Memorandum of Understanding (MOU) to develop a $134 million trust fund to support the efforts of the Association of Southeast Asian Nations (ASEAN) countries to increase green finance and move to low-emission and climate-resilient development. climate.
The UK-ASEAN Green Finance Catalytic Trust Fund (ACGF) will leverage UK and ADB funds to accelerate a range of low-carbon, climate-resilient infrastructure projects and catalyze financing from renewable sources. public and private capital.
The fund will be part of the ASEAN Green Recovery Platform launched at COP26.
“We are facing a climate crisis and Southeast Asia needs fast and innovative solutions to help countries raise finance to meet their climate goals and ambitions,” said ADB President Masatsugu Asakawa.
“This new fund will build on a longstanding partnership between the UK and the ADB through an innovative revolving fund structure that will mobilize public and private funds and build a strong pipeline of climate projects in the region.”
ASEAN countries are grappling with the rising costs of climate change, adding to existing investment needs of $210 billion a year for infrastructure in the region and compounding the increased vulnerability of people and the economy in the aftermath of the pandemic. of COVID-19.
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“As a trusted partner of ASEAN, this UK funding through the ABS is imperative to help make new green investments honest and trustworthy, creating jobs and putting UK expertise at the heart of the fight against climate change. climate change,” said the British minister for Asia, Amanda Milling.
“It is a further step in fulfilling the commitments made by the UK at COP26 in Glasgow last year.”
The fund will leverage financial resources for the ACGF, an ADB-managed regional green financing vehicle owned by ASEAN and ADB countries.
Since its launch in 2019, the ACGF has attracted $2 billion in co-financing pledges and has included five projects in its formal funding portfolio.
It has helped develop a longer portfolio of 29 green infrastructure projects and provided advisory support that has enabled countries to tap into capital markets through the issuance of more than $5.6 billion in green bonds.
The Fund will build on these efforts and support countries through loans and technical assistance to mobilize capital, including through regional initiatives such as the Indonesia-based Blue SEA (Southeast Asia) Finance Hub.
The ADB recently raised its ambition to provide climate finance to its developing member countries to $100 billion between 2019 and 2030. The ADB has committed to ensuring that at least 75% of its total operations support climate mitigation. and adaptation to climate change by 2030. The UK is a founding member of the ADB.
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