The Asian Development Bank (ADB) today announced the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), a landmark program which could significantly ramp up support for the region in the battle against climate change.
The announcement was reportedly made by ADB President Masatsugu Asakawa on the opening day of ADB’s 56th Annual Meeting in Incheon, the Republic of Korea.
Speaking at the meeting, Mr. Asakawa noted that climate change is the critical issue in Asia and the Pacific. “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,” ADB president said, noting that IF-CAP is an exciting, innovative program that will have a real impact and it is another example of how ADB serves as the climate bank for Asia and the Pacific.
IF-CAP's initial partners are Denmark, Japan, the Republic of Korea, Sweden, the United Kingdom, and the United States. 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. With a model of ‘US$1 in, US$5 out’, the initial ambition of US$3 billion in guarantees could create up to US$15 billion in new loans for much-needed climate projects across Asia and the Pacific. A leveraged guarantee mechanism for climate finance has never before been adopted by a multilateral development bank.
IF-CAP financing will contribute to ADB’s raised ambition for $100 billion from its own resources for climate change for 2019–2030. 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 catalyze climate investments.
Established in 1966, the Asian Development Bank is owned by 68 members—49 from the region.
ADB has partnered with Tajikistan since 1998. Under the bank’s country partnership strategy, 2021-2025, ADB operations pursue three strategic priorities: supporting structural reforms to enhance resource allocation and mobilization, improving labor productivity through human capital development, and fostering better livelihoods through investment in a land-linked economy.
To date, ADB has committed 155 public sector loans, grants, and technical assistance totaling more than 2.5 billion US dollars to Tajikistan.
