The UK and the Asian Development Bank (ADB) signed in July a memorandum of understanding to develop a £107-million trust fund to support efforts by ASEAN member states to ramp up green financing and shift to climate-resilient and low-emission development.
The UK–ASEAN Catalytic Green Finance Facility (ACGF) will be part of the ASEAN Green Recovery Platform launched at the COP26 climate summit in Glasgow last year. The trust fund will use UK and ADB funds to accelerate a pipeline of low-carbon and climate-resilient infrastructure projects and catalyse financing from public and private capital sources, ADB says.
The fund will leverage financial resources for the ACGF, an ADB-managed regional green financing vehicle, owned by the ASEAN countries and ADB. Since its launch in 2019, the ACGF has attracted $2 billion in co-financing pledges and included five projects in its formal financing pipeline.
The ten ASEAN member states are seeing rising costs of climate change, which add to the existing investment needs of $210 billion per year for infrastructure in the region, ADB notes.
“We are facing a climate crisis and Southeast Asia needs rapid and innovative solutions to help countries raise financing to deliver their climate targets and ambitions,” ADB President Masatsugu Asakawa said in a statement.
“This new fund will build on a longstanding UK–ADB partnership through an innovative revolving fund structure that will mobilize public and private funds and build a robust pipeline of climate projects in the region.”
“As a trusted partner to ASEAN, this UK financing delivered through the ADB is imperative to help deliver new honest and reliable green investment—creating jobs and putting UK expertise at the heart of tackling climate change,” UK Minister for Asia Amanda Milling said.