The Asian Development Bank (ADB) has announced the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), a landmark programme which could significantly ramp up support for the region in the battle against climate change. IF-CAP financing will contribute to ADB’s target of $100 billion from its own resources for climate change for 2019–2030.

IF-CAP’s initial partners are Denmark, Japan, South Korea, Sweden, the UK, and the US. 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, ADB said in a press release.

With a model of ‘$1 in, $5 out’, the initial target of $3 billion in guarantees could create up to $15 billion in new loans for much-needed climate projects across Asia and the Pacific.

ADB is in discussions with potential partners—such as bilateral and multilateral sources, the private sector, and philanthropies, including the Global Energy Alliance for People and Planet—to catalyse climate investments.

ADB president Masatsugu Asakawa said, “Climate change is the critical issue of our lifetime and here in Asia and the Pacific we are on the frontlines of that battle. 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 is an exciting, innovative programme that will have a real impact. And it is another example of how ADB serves as the climate bank for Asia and the Pacific.”

Fibre2Fashion News Desk (NB)

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