Asian Development Bank has become the first multilateral development bank accredited to receive financing from the Green Climate Fund (GCF) for projects to enhance climate change mitigation and adaptation in its developing member countries, the bank said in a statement yesterday.
The GCF was established in 2010 under the United Nations Framework Convention on Climate Change (UNFCCC) to serve as the central global investment vehicle for climate financing.
It will help the developing countries reduce greenhouse gas emissions and adapt to climate change. To date, a number of 32 countries including seven developing countries have pledged an initial $10.2bn to the fund, with the largest contributions pledged by the US, Japan, the UK, France and Germany.
Bangladesh is a major fund recipient from the ADB for developing its infrastructure and reducing poverty.
“Combining the Green Climate Fund’s concessional finances with ADB’s financing, knowledge, and regional experience will boost much-needed climate change investments in Asia and the Pacific,” said ADB President Takehiko Nakao.
“Successful deployment of financing will help create momentum for the climate agreement expected in December at the UNFCCC climate summit in Paris, France.”
ADB hopes to make its first formal submissions to the fund before the end of this year, said Nakao.
Asia is highly vulnerable to climate change given its many low-lying countries, reliance on agriculture, and rapid urbanisation.
The region’s adaptation costs are estimated at $70bn-$100bn annually through 2050, and failure to act could undo the poverty reduction and economic gains of recent decades.
Moreover, Asia’s share of global greenhouse gas emissions could rise to 46% by 2035 from 37% in 2010 without aggressive efforts to promote low-carbon growth.
The GCF will allocate its resources equally to adaptation and mitigation efforts. Half of the adaptation funds are to be allocated to small island developing countries, least developed countries and African states, with the rest going to other developing countries.
The GCF Board is expected to allocate resources for the first projects and programmes before the 21st Conference of the Parties of the UNFCCC which will be held in Paris, France on 30 November-11 December.
Helping the region cope with climate change is a strategic priority for ADB. In 2014, ADB approved climate financing of just over $3bn — about 75% for climate change mitigation and 25% for adaptation.
In addition, ADB manages $2.6bn through bilateral and multi-donor funds, including Climate Investment Funds, to support areas including clean energy, integrated disaster risk management and urban climate resilience.
Earlier this month, ADB raised $500m from its first Green Bond to finance climate mitigation and adaptation projects.