ADB, partners kick off Innovative Finance Facility for Climate in Asia-Pacific
VGP – The Asian Development Bank (ADB) has joined with partners to show their commitment to climate change financing at a kick-off event at COP29 for the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP).
ADB President Masatsugu Asakawa told attendees IF-CAP was among the most innovative climate financing programs anywhere in the world and would be a vital tool for combating climate change in Asia and the Pacific.
"We know that the battle against climate change is the major challenge of our time," Mr. Asakawa said. "It is a challenge that requires transformative, decisive, and innovative action—which IF-CAP will provide. Among all multilateral development banks, it puts ADB at the forefront of climate finance innovation. With a multiplier effect of 4.5, it will unleash billions of dollars in much-need investment for combating climate change in Asia and the Pacific."
Joining Mr. Asakawa at the event were representatives from IF-CAP partners: Australia Assistant Minister for Climate Change and Energy Josh Wilson, Denmark Under-Secretary of State for Development Cooperation Ole Thonke, Japan Deputy Vice Minister for International Affairs Kazuki Watanabe, Republic of Korea Deputy Minister for International Affairs Ji-young Choi, Norway Special Envoy for Climate and Security Hans Olav Ibrekk, Sweden Climate Ambassador from Ministry of Climate and Enterprise Mattias Frumerie, United Kingdom Foreign Secretary David Lammy, United States Assistant Secretary of the Treasury Alexia Latortue, and Global Energy Alliance for People and Planet Chief Executive Officer Woochong Um.
Azerbaijan Minister of Finance and ADB Governor Samir Sharifov also attended representing the COP29 Presidency.
IF-CAP is targeting total guarantees of US$2.5 billion, which will go toward covering parts of ADB's existing loan portfolio. That will allow ADB to free up an estimated US$11.25 billion in dedicated climate financing for the region.
ADB has already welcomed guarantees of close to US$2.2 billion: US$1 billion from the United States, US$600 million from Japan (plus a US$25 million grant), US$280 million from the United Kingdom, US$200 million from Australia, and US$100 million from Denmark through Investment Fund for Developing Countries (IFU).
IF-CAP responds directly to the Group of Twenty (G20) recommendations that MDBs increase their lending through novel approaches such as risk transfers./.
Asia and the Pacific require an estimated US$102 billion to US$431 billion per year to adapt to global warming, according to ADB's Asia-Pacific Climate Report 2024. This far exceeds the US$34 billion of adaptation finance that was tracked going into the region in 2021–2022.
