ADB Doubles Climate Financing to $1 Billion in 2023 from Private Sector Operations

The bank committed a record 40 private sector transactions worth $1.7 billion through its own capital resources, marking a 54% increase from the previous year.


Devdiscourse News Desk | Manila | Updated: 30-05-2024 20:50 IST | Created: 30-05-2024 20:50 IST
ADB Doubles Climate Financing to $1 Billion in 2023 from Private Sector Operations
In 2023, ADB achieved $3.4 billion in long-term cofinancing with the private sector, underscoring its strategy to mobilize private capital for development priorities such as climate change. Image Credit:
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The Asian Development Bank (ADB) has significantly increased its climate financing from private sector operations, doubling the amount to $1 billion in 2023. According to the Development Effectiveness Report of Private Sector Operations 2023, 75% of ADB's projects included climate-related funding. The bank committed a record 40 private sector transactions worth $1.7 billion through its own capital resources, marking a 54% increase from the previous year.

Mobilizing Private Capital for Climate and Development Goals

In 2023, ADB achieved $3.4 billion in long-term cofinancing with the private sector, underscoring its strategy to mobilize private capital for development priorities such as climate change. For every $1 committed by ADB's private sector operations, $2.7 in long-term cofinancing was realized, a substantial increase from the previous year’s ratio of $1.8.

“Our results show that ADB is a trusted development partner of the private sector, which will play a crucial role in providing the resources this region needs to address its key development challenges,” said ADB Vice-President for Market Solutions Bhargav Dasgupta. “In 2023, ADB led the financing of major development projects, making them attractive to investors and helping developing member countries to achieve their climate and other development goals.”

Launch of LEAP 2 Fund and Expanded Project Commitments

ADB, in collaboration with the Japan International Cooperation Agency, launched the Leading Asia’s Private Infrastructure Fund 2 (LEAP 2), with a capital commitment of up to $1.5 billion. This initiative follows the successful initial LEAP fund initiated in 2016, aimed at cofinancing high-quality, climate-resilient, and sustainable infrastructure projects.

In its efforts to diversify private sector operations, ADB committed 25 private sector projects in frontier economies and new, challenging sectors in 2023, representing 63% of all projects for the year. The Trade and Supply Chain Finance Program facilitated over $4.7 billion through more than 21,000 trade and supply transactions.

Impact on MSMEs and Agribusiness

Projects committed in 2023 are expected to benefit 170,800 micro, small, and medium-sized enterprises (MSMEs), with nearly 98,000 of them led by women. Agribusiness projects will support the livelihoods of nearly 77,000 farmers. ADB's active private sector portfolio has created over half a million jobs, benefited 36.9 million MSMEs, and reduced greenhouse gas emissions by 22.2 million tons of carbon dioxide equivalent.

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