A collaborative initiative between private and public sectors has launched a finance facility aimed at providing $1bn in green infrastructure investments across Southeast Asia.
In early April the “Association of Southeast Asian Nations (ASEAN) Catalytic Green Finance Facility” was launched by Southeast Asia governments, the Asian Development Bank (ADB), and major development financiers.
The initiative will provide a $1bn fund for green infrastructure projects. This will enable financial services in the form of loans and technical assistance for the infrastructure projects, such as clean energy and sustainable transport. The project is aimed at producing private capital through innovative finance structures, in order to reduce financial risks for green infrastructure projects.
Takehiko Nakao, president of ADB, said: “Through the ASEAN Catalytic Green Finance Facility, ADB will support ASEAN governments in developing green and climate-friendly infrastructure projects to contribute to fighting climate change, improving the quality of air and water, and reducing environmental degradation across the region.”
The $1bn fund is made up of contributions from ASEAN partners including: $75m from the ASEAN Infrastructure Fund (AIF); $300m from ADB; €300m ($336m) from German state-owned development bank, KfW; €150m ($170m) from the European Investment Bank; and €150m ($170m) from Agence Française de Développement.
Partners Organisation for Economic Co-operation and Development and the Global Green Growth Institute will support knowledge sharing and help build understanding of the principles and standards for green projects. The finance facility is part of a regional financing initiative, the “Green and Inclusive Infrastructure Window”, run by the AIF and first created by the ASEAN governments and ADB in 2011.
During the launch of the ASEAN Catalytic Green Finance Facility, the AIF also announced the “Inclusive Finance Facility” aimed at providing “concessional financing for critical infrastructure in Cambodia, the Lao People’s Democratic Republic, and Myanmar,” said ADB.
Apisak Tantivorawong, minister of finance for Thailand, said: “As ASEAN chair for 2019, Thailand’s vision for finance cooperation is sustainable and inclusive. In light of this, the launch of the two new facilities under AIF is timely and much needed.”