ADB urges SEA economies: Tap green financing for recovery

MANILA, Philippines — The Asian Development Bank (ADB) is urging policy makers in Southeast Asia to tap into green financing to raise funds for projects that will help economies recover.

A new report by the Manila-based multilateral agency, “Green Finance Strategies for Post-COVID-19 Economic Recovery in Southeast Asia,” said innovative financing can help catalyze the $3.1-trillion investments required for climate-smart infrastructure in the region by 2030.

Green finance, which comes from private and public sources, refers to all financing instruments, investments, and mechanisms that contribute to climate and environmental sustainability goals.

These fund projects are aimed at reducing greenhouse gas emissions, boost climate resilience, improve air and water quality, as well as protect ecosystems and biodiversity.

The report recommends that governments use green finance to build on national green programs and steer away from fossil fuel or carbon-intensive investments.

“A green recovery for Southeast Asia is needed to encourage long-term, sustainable job creation in a region with more than 650 million people,” said ADB vice president Ahmed Saeed.

“It will boost equitable growth, protect the environment, and help governments meet the Paris climate agreement targets. This timely book shows how green finance can spur growth in the region and overcome the challenges of climate change and a global pandemic.”

ADB supports innovative financing mechanisms for green infrastructure, including thematic bonds, national green finance vehicles, green projects, and other initiatives.

The bank-administered Association of Southeast Asian Nations (ASEAN) Catalytic Green Finance Facility (ACGF) aims to spur more than $1.4 billion in green infrastructure investments across Southeast Asia.

ADB said that in recent years, rising investor interest in green financing in Developing Asia has been reflected in the growth of green, sustainability, and social bonds.

With a growing green finance market in Developing Asia, ADB committed $6.5 billion in climate finance from its own resources in 2019.