Terms and Criteria

This page provides an overview of eligibility criteria and conditions for ASEAN governments to access loans from the ASEAN Catalytic Green Finance Facility. It includes information on the ACGF’s investment principles, green criteria, lending terms, relevant sectors and project types, and project origination and approval steps. More detailed information is available in the ACGF Operations Plan 2019–2021 and the ACGF’s Investment Principles and Eligibility Criteria document.

Principles

The ACGF helps prepare and provides financing for green infrastructure projects that address three main objectives, as follows:

  1. Demonstrate a measurable contribution to green impacts i.e. climate change and environmental sustainability,
  2. Demonstrate an improvement in bankability, and
  3. Demonstrate the potential to catalyze private capital.

Green Criteria

The green eligibility criteria for the ACGF is aligned with the ADB Green Bond Framework and the ASEAN Green Bond Standards. The criteria used to select ACGF projects are summarized in Table 1.

Table 1: ACGF Criteria for Green Projects
Goal Climate Change Mitigation Climate Change Adaptation Environmental Sustainability
Description Projects target a reduction of greenhouse gas emissions or the sequestration of emissions. Projects address current and expected effects of climate change and target an improvement in resilience or a reduction in vulnerability. Projects contribute to environmental sustainability of land, air, and/or water, by promoting more efficient use of natural resources, healthy ecosystems, and biodiversity.
Eligibility

Eligible investments would qualify as climate change mitigation finance as per the Joint MDBs-IDFC Common Principles for Climate Mitigation Finance Tracking.

They should:

  1. be included in the list of eligible categories and/or activities (based on the principles),
  2. demonstrate a reduction in GHG emissions against a baseline scenario, and
  3. at least 60% of the total project cost should qualify as climate finance.

Eligible adaptation investments would be identified based on the Joint MDBs-IDFC Common Principles for Adaptation Finance Tracking.

They should:

  1. Be identified through the following process: (a) context of risks, vulnerabilities, and impacts related to climate variability and climate change set out; (b) intent to address the identified risks, vulnerabilities, and impacts stated; and (c) direct link between the identified risks, vulnerabilities and impacts, and financed activities demonstrated.
  2. At least 60% of the total project cost should qualify as climate finance.

Eligible mitigation or adaptation projects (as defined here) that also contribute to environmental sustainability by:

  1. improving air quality;
  2. improving water quality;
  3. promoting healthy ecosystems and biodiversity; and
  4. promoting more efficient use of resources, including through the promotion of a circular economy.
Examples
  • Solar or wind power project
  • Support for electric vehicles including charging infrastructure
  • Development of a transmission line to integrate renewable energy into the grid
  • Improving water supply infrastructure in drought prone areas
  • Flood protection infrastructure in areas with increased incidence of flooding
  • Sustainable value chains in the agriculture or fisheries sector to reduce pollution or increase energy efficiency
  • Reducing land-based sources of marine pollution including plastics, wastewater, and agricultural runoff
Exclusions New and improvements to existing fossil-fuel related power generation would be excluded (in line with the ADB Green Bond Framework and the ASEAN Green Bond Standards).
Screening criteria The Project Information Memorandum (PIM) will include an estimate of potential greenhouse gas reductions, ideally measured against a business-as-usual baseline. Baseline setting will be determined by project context and conditions, and where available and relevant; the approach will follow the International Financial Institutions’ Harmonized Frameworks for Greenhouse Gas Accounting. The PIM will include an estimate of the number of direct and indirect beneficiaries (vulnerability reduced/resilience improved) by the project as well as the number of beneficiaries, relative to the total population. The PIM will include a quantitative (through the use of relevant, project-specific indicators) or qualitative assessment of contribution toward an (i) improvement of air quality, (ii) improvement of water quality, (iii) promotion of healthy ecosystems and biodiversity, or (iv) promotion of more efficient use of resources.

Relevant Sectors and Project Types

The ACGF will support green infrastructure development in energy, transport, water, urban, and multisector projects that actively contribute to environmental sustainability and climate goals as described in the table 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 Terms

Eligible projects can access loans from the ASEAN Infrastructure Fund (AIF), through the ACGF (under the AIF Green and Inclusive Infrastructure Window), with cofinancing from ADB’s sovereign operations. Cofinancing from ACGF Partners could also be available, depending on the project.

Table 2 outlines the terms offered for ACGF-eligible loans from the AIF. To help incentivize green infrastructure investments, the AIF provides low lending rates through the ACGF for the initial 7-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. Cambodia, Lao PDR, and Myanmar could avail of more concessional terms from AIF, depending on the project.

Table 2: ASEAN Catalytic Green Finance Facility Lending Terms
Item Description
Eligible Borrowers ASEAN Infrastructure Fund borrowing member countries: Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Thailand, and Viet Nam
Maturity (years) Up to 20
Grace Period (years) Up to 7
Interest Rate 6-month $LIBOR: during grace period 6-month $LIBOR plus 140 basis points: after grace period up to 20 years
Maximum Lending Volume With Inclusive Finance Facility, Combined limit of 15% of AIF total equity
Commitment Fee 15 basis points
Prepayment No prepayment penalty

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.