On April 4, 2019 in Chiang Rai, Thailand, several Southeast Asian governments, the Asian Development Bank (ADB), and major development financiers launched the ASEAN Catalytic Green Finance Facility. The new initiative is designed to boost climate resilience by spurring over $1 billion in green infrastructure investments across the region.
The launch ceremony was witnessed by Thailand’s Minister of Finance, Apisak Tantivorawong, and by ADB President Takehiko Nakao. Senior officials from the Association of Southeast Asian Nations (ASEAN) and private sector partners joined the ceremony.
The new facility provides loans and necessary technical assistance for sovereign green infrastructure projects such as sustainable transport, clean energy, and resilient water systems. It aims to catalyze private capital by mitigating risks through innovative finance structures.
The facility will mobilize a total of $1 billion including $75 million from the ASEAN Infrastructure Fund (AIF), $300 million from ADB, €300 million ($336 million) from KfW, €150 million from the European Investment Bank, and €150 million from Agence Française de Développement. The Organisation for Economic Co-operation and Development and the Global Green Growth Institute will support knowledge sharing and capacity building on green finance. The Overseas Private Investment Corporation has expressed interest in potential financing for emerging projects.
The facility is part of a new “Green and Inclusive Infrastructure Window” under the AIF, a regional financing initiative established by ASEAN governments and ADB in 2011 and administered by ADB. Since its establishment, the AIF has committed $520 million for energy, transport, water, and urban infrastructure projects across the region.
At the launch event, the AIF also launched a new “Inclusive Finance Facility” to provide concessional financing for critical infrastructure in Cambodia, the Lao People’s Democratic Republic, and Myanmar.
“As ASEAN chair for 2019, Thailand’s vision for finance cooperation is sustainable and inclusive,” said Mr. Tantivorawong. “In light of this, the launch of the two new facilities under AIF is timely and much needed.”
“Through the ASEAN Catalytic Green Finance Facility, ADB will support ASEAN governments in developing green and climate-friendly infrastructure projects that will contribute to fighting climate change, improving the quality of air and water, and reducing environmental degradation across the region,” added Mr. Nakao.
Featured photo (courtesy of ADB) shows ADB President Takehiko Nakao (standing, fifth from left), Thailand Minister of Finance Apisak Tantivorawong (standing, sixth from left), ASEAN Ministers of Finance and senior officials, and representatives from development and private sector partners during the launch of the ASEAN Catalytic Green Finance Facility in Chiang Rai.