The Asian Development Bank (ADB) on 2nd May announced the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP).
- It is a landmark program which could significantly ramp up support for the region in the battle against climate change.
- The announcement was made by ADB President Masatsugu Asakawa on the opening day of ADB’s 56th Annual Meeting in Incheon.
- 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 ‘$1 in, $5 out’, the initial ambition of $3 billion in guarantees could create up to $15 billion in new loans for much-needed climate projects across Asia and the Pacific.
- 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.
- ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
