The Asian Development Bank (ADB) along with other development banks and Southeast Asian governments have launched a new ‘ASEAN Catalytic Green Finance Facility’, a new initiative to invest more than $1bn in green infrastructure investments across Southeast Asia.
ADB will contribute $300m to the fund and $336m will come from KfW. ASEAN Infrastructure Fund (AIF) will provide $75m, the European Investment Bank will offer €150m for the facility, and Agence Française de Développement will provide €150m.
The Organisation for Economic Co-operation and Development and the Global Green Growth Institute have agreed to provide the fund with knowledge and capacity building on green finance. The Overseas Private Investment has also expressed interest in potential financing for future projects.
The new facility is part of the ‘Green and Inclusive Infrastructure Window’ under the AIF, a regional financing initiative formed by ASEAN governments and ADB in 2011 and administered by ADB.
AIF has also launched ‘Inclusive Finance Facility’ to provide concessional financing for infrastructure in Cambodia, Laos and Myanmar.
Thailand Minister of Finance Apisak Tantivorawong said: “As ASEAN chair for 2019, Thailand’s vision for finance cooperation is sustainable and inclusive. In light of this, the launch of the two new facilities under AIF is timely and much needed.”
ADB president Takehiko Nakao said “Through the ASEAN Catalytic Green Finance Facility, ADB will support ASEAN governments in developing green and climate-friendly infrastructure projects that will contribute to fighting climate change, improving the quality of air and water, and reducing environmental degradation across the region.”
Last month, the ADB agreed to provide $152m loan to support the construction of the 275MW combined-cycle gas turbine power plant to be located in Riau province in central Sumatra, Indonesia. The power plant is expected to support the country in its energy security and supply communities with affordable and reliable electricity.
The loan includes $70m from ADB and the remaining $82m from Sumitomo Mitsui Banking and MUFG Bank. Besides these loans, the International Finance Corporation (IFC) will also provide $50m for the power project.