The Asian Development Bank (ADB) has announced the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), a landmark program which could significantly ramp up support for the region in the battle against climate change. ADB President Masatsugu Asakawa made the announcement on Tuesday, the opening day of ADB’s 56th Annual Meeting in Incheon.
“Climate change is the critical issue of our lifetime and here in Asia and the Pacific we are on the frontlines of that battle,” Asakawa said. “The climate events we have experienced over the past 12 months will only increase in intensity and frequency, so we must take bold action now.”
IF-CAP’s initial partners are Denmark, Japan, the Republic of Korea, Sweden, the United Kingdom, and the United States. Those partners are in discussions with ADB about providing a range of grants for project preparation along with guarantees for parts of ADB’s sovereign loan portfolios. The reduced risk exposure created by the guarantees will allow ADB to free up capital to accelerate new loans for climate projects. With a model of ‘$1 in, $5 out’, the initial ambition of $3 billion in guarantees could create up to $15 billion in new loans for much-needed climate projects across Asia and the Pacific. IF-CAP financing will contribute to ADB’s raised ambition for $100 billion from its own resources for climate change for 2019–2030.
Meanwhile, Union Finance Minister Nirmala Sitharaman had a bilateral meeting with Asakawa at ADB HQ, on the sidelines of the annual meeting. Sitharaman impressed upon ADB to extend support to India with more concessional climate financing, asserting that India’s economic and developmental program can have a huge positive impact regionally and globally.
