ADB commits nearly $10B in climate finance

THE Asian Development Bank (ADB) pledged a record sum of nearly $10 billion in climate finance last year to assist its developing member countries in the Asia-Pacific region.

The ADB invested $9.8 billion in climate finance, allocating $5.5 billion for mitigation and $4.3 billion for adaptation. This marked a significant 46-percent increase compared to its climate financing commitments in 2022.

In 2023, the bank’s commitments to climate adaptation finance reached $10.4 billion, exceeding its 2019-2024 target of $9 billion a year ahead.

The institution said that this is crucial for the Asia-Pacific region, which faces increased extreme heat, droughts and heavy rains with current adaptation investments falling short of the necessary amount.

“Climate change threatens the future of all development. 2023 was the hottest year on record and saw a swath of extreme, deadly climate impacts in our region,” ADB President Masatsugu Asakawa said.

Asakawa stated that the crisis poses risks to energy and food security, and brings fiscal challenges.

As the climate bank for the AsiaPacific region, the ADB said that it is strongly dedicated to assisting developing members in shifting away from fossil fuels, advancing their climate transition and reaching net-zero objectives.

It states that the region contributes over half of global carbon dioxide emissions and is highly susceptible to the effects of climate change.

To achieve net zero by 2050, the region must invest about $3.1 trillion annually in energy and transportation infrastructure alone, which is approximately 50 percent higher than current levels.

The ADB plans to provide $100 billion in climate financing from its funds from 2019 to 2030.

Its key climate projects in 2023 include a $400 million policybased loan to assist Bangladesh in implementing its national adaptation plan for climate-focused development.

Additionally, there is a $1-billion loan to support the deployment of the Philippines’ first large-scale electric bus system in Davao City.

An $18-million grant from the Asian Development Fund (ADF), meanwhile, aims to enhance the resilience, inclusiveness and sustainability of water supply and sanitation services in the Federated States of Micronesia.

The ADF provides grants to ADB’s lower-income member countries to foster poverty reduction and improve quality of life.