Speech by Masatsugu Asakawa, ADB President, at the event Financing Green Recovery for a Low-Carbon and Climate-Resilient Southeast Asia at the 26th session of the Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC), 2 November 2021, Glasgow, UK
Your Excellencies, ladies and gentlemen, good afternoon.
I would like to begin by extending my deep appreciation to Minister Sri Mulyani Indrawati, Minister Arifin Tasrif, Minister Grace Fu, and Deputy Secretary-General Satvinder Singh for their support today.
I also would like to thank our partners, the Right Honourable James Cleverly, Executive Director Yannick Glemarec, Chief Executive Officer Remy Rioux, Chief Executive Officer and General Manager Dario Scannapieco, and Director-General Koen Doens.
We meet today because of our shared commitment to promote a green recovery in ASEAN. I am encouraged that your ongoing efforts—and pledges of support—will help to turn the tide of this climate crisis.
Let me briefly discuss with you why our work together to secure robust financing for a green recovery in ASEAN is so vital.
ADB views this work as a key component of our overall commitment to take bold and urgent action against climate change.
As I announced last month, we are raising our ambition to deliver $100 billion in cumulative climate financing between 2019 and 2030—including $34 billion in cumulative adaptation and resilience investments. The remaining $66 billion is for mitigation.
We have also updated our energy policy to formally withdraw from financing new coal-fired power generation and support the development of sustainable and resilient energy systems, in line with the Paris Agreement.
And tomorrow, we will launch our Energy Transition Mechanism partnership, or ETM, which will use blended finance to accelerate the retirement or repurposing of existing coal-fired power plants.
I. The need for financing to support green recovery in ASEAN
My friends, as you know well, Southeast Asia is one of the most vulnerable regions in the world to climate impacts. The changing climate has affected our communities, infrastructure, food security, and the well-being of our people.
Amid these unfortunate developments, we face a unique window of opportunity to promote a greener and more inclusive future: by investing smartly in ASEAN’s recovery from the coronavirus disease (COVID-19) pandemic.
To get us on this brighter path, we need ambitious climate projects to be scaled up—to meet Nationally Determined Contributions, or NDCs.
We also need to address the key challenge of financing.
ADB estimates that developing Asia needs $1.7 trillion per year to support climate resilient infrastructure. ASEAN countries alone need $210 billion per year, but they currently face an estimated funding gap of over $100 billion per year.
Countries also face heavy fiscal space constraints due to huge expenditures related to the pandemic.
II. Catalyzing climate finance through the ASEAN Green Recovery Platform
To bridge this infrastructure funding gap, it is clear that private investment needs to be scaled up.
Let me briefly mention how ADB is addressing this important need through the ASEAN Green Recovery Platform.
The platform brings together partners to invest alongside ADB’s own financing. With pledges of $665 million from the UK government, the Green Climate Fund, the European Union, and Cassa Depositi e Prestiti, the Green Recovery Platform will de-risk investments and catalyze $7 billion in public and private capital for green infrastructure projects. So, leverage is around 10 times.
It will also provide technical assistance to improve the bankability of investments, build a robust project pipeline for the region, and support the development of green capital markets.
The Green Recovery Platform will be linked to the ASEAN Catalytic Green Finance Facility, ACGF, under the ASEAN Infrastructure Fund, which is a regional vehicle owned by ASEAN governments and ADB, and managed by ADB.
Partnerships under this new platform will complement the $1.4 billion in co-financing that has already been pledged toward the ACGF by ASEAN governments, ADB, Agence Française de Développement, the European Investment Bank, KFW, and the Government of Korea.
Let me close by saying that ADB looks forward to working with our partner governments, the private sector, and all stakeholders as The Climate Bank for Asia and the Pacific.
I look forward to hearing your views about how we can make our shared vision of a swift and green recovery a reality in ASEAN.