Catalyzing Climate Finance: Lessons Learned from the Shandong Green Development Fund
This paper examines the establishment of the Shandong Green Development Fund; reviews its design, implementation, and impact; and assesses if this can be further developed and extended to other countries in the Asia and Pacific.
In 2019, the Asian Development Bank (ADB) approved a $100 million loan contributing to climate finance for the $1.5 billion Shandong Green Development Fund Project. The fund introduces an innovative leveraging mechanism to catalyze private, institutional, and commercial capital for the development of climate-friendly infrastructure and business in Shandong Province, the People’s Republic of China. This paper sets out ADB’s experience in establishing scalable institutional structures for climate finance and presents current and prospective ADB roles in support of such structures and resultant value addition. The paper also discusses key considerations in designing the operational systems of such institutions and provides policy rationale for government action.
- Context of the Green Finance Catalyzing Facility in Shandong
- Structural Considerations in Fund Design
- Financial, Institutional, and Project Financing Structures of Shandong Green Development Fund
- Operational Structure