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.
ORGANIZATION
ACCOUNTABILITY
ADB supports projects in developing member countries that create economic and development impact, delivered through both public and private sector operations, advisory services, and knowledge support.
ASEAN Catalytic Green Finance Facility (ACGF)
The ACGF is an ASEAN Infrastructure Fund initiative supporting governments in Southeast Asia to prepare and finance infrastructure projects that promote environmental sustainability and contribute to climate change goals. The ACGF is owned by ASEAN governments and ADB and managed by ADB.
ACGF: Projects
Since 2019, all ASEAN Infrastructure Fund (AIF) commitments to new investments have been channeled through the ACGF, following its lending modalities and terms, and meeting its criteria for green impact, bankability, and private sector mobilization. With the ACGF’s growing pipeline and portfolio, impact is maximized by allocating a smaller amount of AIF funds into each project to leverage a larger amount of funding from ADB and partner resources.
Investment Principles and Eligibility Criteria
All ACGF projects must meet the ACGF investment principles and eligibility criteria. The criteria were developed jointly by the governments of ASEAN member states and ACGF cofinancing partners and align with the ADB Green Bond Framework and the ASEAN Green Bond Standards. As such they were approved by the AIF Board in November 2019 with the aim to support projects that help meet climate change and environmental goals (green impact), are financially sustainable (bankable), and are designed to mobilize private, institutional, and commercial (PIC) capital in the long term.
ACGF criteria for green impact, bankability, and private sector mobilization
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Green impact
Classification as "green" or "priority green" projects, with every project (i) meeting a minimum threshold for climate finance, (ii) demonstrating GHG reduction and climate resilience, and (iii) demonstrating contribution to other environmental benefits.
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Bankability
Potential for support to improve financial viability and/or sustainability and bankability.
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Private capital catalyzation
Potential to catalyze or have a roadmap in place to catalyze at least 10% resources from private, institutional and commercial sources at any time over the first 8 years.
Relevant Sectors and Project Types
The ACGF will support green infrastructure development in the energy, transport, water, and urban sectors, as well as multisector projects that actively contribute to environmental sustainability and climate goals as described above. Examples of green infrastructure include, but are not limited to, renewable energy, energy efficiency, sustainable transport systems, green cities, and sustainable water supply and sanitation.
Lending Modalities and Terms
The ACGF offers attractive lending terms, complementing ADB and partner resources, through two modalities: An ACGF Regular lending modality, open for all AIF borrowing member countries, and an ACGF Concessional lending modality, open for ADB Group A (concessional assistance-only) developing member countries. To help incentivize green infrastructure investments, the ACGF provides low lending rates for the initial years of the project cycle. This two-tier pricing system will partially offset the high upfront capital costs that green infrastructure projects often face, thereby helping to de-risk the projects.
ASEAN Catalytic Green Finance Facility Lending Terms
The transition from LIBOR to the Secured Overnight Financing Rate (SOFR) was completed in 2021, and from 1 January 2022 all applicable loans were transitioned to the new terms.
| ACGF Regular Lending Terms | ACGF Concessional Lending Terms | |
|---|---|---|
| Eligible borrowers | AIF borrowing member countries | AIF borrowing member countries that fall under ADB’s Group A Classification |
| Maturity (years) | Up to 20 | 25 |
| Grace period (years) | Up to 7 | 5 |
| Interest rate |
6-month SOFR compounded in arrears plus 30 bps adjustment spread: during grace period 6-month SOFR compounded in arrears plus 30 bps adjustment spread plus 140 bps: after grace period up to 20 years Previous rates (before 2022): |
1%: years 1–5 1.5%: years 6–25 |
| Grant element | None | >35% |
| Maximum lending volume | With ACGF (concessional) combined limit of up to 18% of AIF total equity | 10% of AIF total equity |
| Commitment fee | 15 bps | None |
| Maturity premium/ Prepayment premium | As applicable for ADB OCR loans | None |
| Prepayment | No prepayment penalty | None |
ADB cofinancing loans will follow ADB’s terms and conditions for its regular ordinary capital resources (OCR) and/or concessional OCR loans. Terms for financing provided by the ACGF’s other cofinancing partners will be available on a project-by-project basis.
ASEAN Infrastructure Fund Projects
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ACGF Project Process
1. Origination
Potential projects for early-stage project preparation support identified from ACGF country roundtable events and consultations with ADB operations teams and ACGF partners.
2. Rapid assessment
Technical support provided for initial project preparation, including financial structuring and an assessment of potential green impacts.
3. Screening and funding interest
Projects screened against ACGF eligibility criteria, and a draft project information memorandum produced. Financing interest sought from ACGF cofinancing partners.
4. AIF Board review
A full project information memorandum (including a financing plan) finalized and submitted to the ASEAN Infrastructure Fund Board for review and approval.
5. Project preparation and loan approval
Due diligence conducted and the project prepared for ADB and ACGF cofinancing partner loan approvals.