The Market Monitor Minding the Nation's Business
The Asian Development Bank (ADB) reported approving $3.7 billion (P185 billion) in climate finance investments in 2016.
According to recently released ADB figures, the investments last year constituted a 42 percent increase from the $2.6 billion reached in 2015.
Estimates show that in 2016, climate finance from ADB’s internal sources reached a record $2.65 billion for climate mitigation and $1.08 billion for climate adaptation.
“ADB is responding to the Paris Agreement by boosting its support to climate action in developing member countries, in line with their Nationally Determined Contributions and the Sustainable Development Goals,” said ADB President Takehiko Nakao.
“ADB remains committed to scaling up its climate financing to $6 billion (P300 billion) by 2020, of which $4 billion (P200 billion) will target mitigation and $2 billion (P100 billion) adaptation,” he said.
It is expected that ADB’s spending on climate change will increase to around 30 percent of its overall financing by 2020.
In addition to its own financing, ADB mobilized $701 million (P35.05 billion) from external sources, with $595 million (P29.75 billion) invested in mitigation and $106 million (P5.3 billion) in adaptation. Including financing form external sources, ADB delivered over $4.4 billion (P220 billion) in climate finance in 2016.
Among the adaptation projects backed by ADB is a $500 million (P25 billion) loan to the Bihar New Ganga Bridge Project in India, which will construct a new road bridge across the Ganges River and an integrated road network in the state of Bihar.
A bank-to-bank bridge design was recommended over the alternative of building two smaller bridges and a connecting expressway, which was deemed to be more vulnerable to flooding. $200 million (P10 billion) of the project cost is considered as addressing climate adaptation.
Among the mitigation projects, a $47 million (P2.35 billion) loan to the Distributed Commercial Solar Power Project in Thailand will help deploy a total of 100 megawatts of solar photovoltaic systems on commercial and industrial infrastructure at no up-front cost to the host companies
ADB said it will continue to work with public and private sector partners to mobilize additional financing for climate projects.
In December 2016, the Green Climate Fund announced its support to ADB’s proposed Pacific Islands Renewable Energy Investment Program. This includes a $12 million (P600 million) grant to help Cook Islands install energy storage systems and support private sector investment in renewable energy, as well as a $5 million (P250 million) grant to assist seven Pacific island countries to transition to renewable energy sources.
In response to climate action commitments made under the COP 21 Paris agreement by its developing member countries (DMCs), ADB is developing a Climate Change Strategic Framework.
The strategic framework will spell out ADB’s future direction regarding climate change from 2017 to 2030, and will feed into ADB’s new corporate strategy toward 2030, which is currently under development.
It will also outline how ADB will deliver on its $6 billion (P300 billion) goal by 2020 and the anticipated growth in DMC demand for ADB support for climate action to 2030.