ADB, Singapore firm sign accord on innovative green finance for infras
The Asian Development Bank (ADB) said yesterday that it signed a cooperation agreement with Singapore’s Infrastructure Asia to help Southeast Asian nations identify bankable and sustainable “innovative and green” infrastructure projects.
The Manila-based lender said the agreement will allow state-owned firms as well as regional and municipal governments in the region improve their institutional, financial, and governance capacities for developing innovative and green infrastructure programs and project.
The Southeast Asian nations, which need total $210 billion until 2030, are currently facing significant financing gaps in meeting their infrastructure needs, including for climate change mitigation and adaptation cost.
“We need innovative financing approaches to mitigate risks in infrastructure projects and better leverage public funds, so that many more funds are catalyzed from private and institutional sources,” Ramesh Subramaniam, ADB director general for Southeast Asia said.
The agreement was signed during the Asia Infrastructure Forum in Singapore by Subramaniam and Seth Tan, executive director at Infrastructure Asia, an agency mandated to support Asia’s economic and social growth through infrastructure development.
“Projects structured with better financial and technical elements, along with good partnerships, are key to helping improve the bankability of Asia’s sustainable infrastructure projects,” Tan said.
“Through this collaboration with ADB, Infrastructure Asia will work in close consultation with the international financing, credit enhancement, and technology ecosystem in Singapore to improve municipalities and state-owned enterprises’ access to private capital,” he added.
ADB and Infrastructure Asia are set to launch the Innovative Finance Lab for Sustainable Infrastructure, a virtual space supported by a biannual event in Singapore, to gather stakeholders across Southeast Asia.
The biannual gathering aims to exchange knowledge, improve the region’s policy-making capacities, and foster the adoption of innovative and green finance models in local infrastructure projects.
It will also serve as a capacitybuilding platform for the Association of Southeast Asian Nations’ (ASEAN) Catalytic Green Finance Facility (ACGF), which was launched last April to boost the development of green infrastructure projects in the region.
ACGF aims to mobilize around $1.3 billion from a number of sources, including the ASEAN Infrastructure Fund, ADB, the German development cooperation through KfW, the European Investment Bank, the Republic of Korea, and Agence Française de Développement.
The facility is also supported by other entities, including the Organization for Economic Cooperation and Development, the Global Green Growth Institute, and the Overseas Private Investment Corporation.