ASEAN gets $300 million for green recovery program

by Louise Maureen Simeon (The Philippine Star), 23 Mar 2021

MANILA, Philippines — South Korea-based Green Climate Fund (GCF) has earmarked $300 million (P14.57 billion) to support Asian Development Bank’s (ADB) green recovery program in Southeast Asia, with the Philippines among the top priorities.

In a statement, Manila-based ADB said the GCF allocation would support the region in its move toward a climate-resilient, environmentally sustainable economic recovery from the pandemic.

GCF is a global fund created to help developing countries like the Philippines address the challenges of climate change. ADB has received 12 funding approvals totaling $948 million (P46 billion) since 2015.

The $300 million funding will be downloaded to the ASEAN Catalytic Green Finance Facility (ACGF) green recovery program to catalyze financing from development partners and private capital sources to support more than $4 billion worth of green infrastructure projects across the region.

All projects supported by the program will incorporate innovative green finance instruments and approaches.

ADB said it would prioritize the use of GCF funding under the program for investment projects in Cambodia, Indonesia, Lao and the Philippines.

“The program will help Southeast Asian countries design green stimulus packages and projects that will create climate-friendly jobs, boost economic growth, and help countries fulfill their pledges under the Paris Agreement to reduce greenhouse gas emissions,” ADB vice president Ahmed Saeed said.

The program aims to help ASEAN countries bridge the gap in financing green infrastructure, with the region’s annual investment needs estimated to be $210 billion (P10.2 trillion) even before the pandemic happened.

Further, the green recovery program will provide technical assistance and concessional loans to about 20 green infrastructure projects across the region.

Over a 30-year period, the projects are expected to reduce carbon dioxide emissions by 119 ?million metric tons and create 340,000 green jobs in key sectors such as sustainable transport, renewable energy and energy efficiency systems, as well as low-carbon agriculture and natural resources.

“The program seeks to accelerate the flow of green capital from banks, investors, and capital markets to Southeast Asia by helping de-risk and prepare bankable green infrastructure investments,” ADB ACGF unit head Anouj Mehta said.

ACGF has published a set of green investment principles and eligibility criteria and created a pipeline of projects, including its first project approved for financing in 2020. It has attracted more than $1.4 billion in co-financing commitments, which will support the green recovery program.