ADB Unveils Nature Bond and Project Incubator to Close Asia’s Nature Finance Gap

Asia and the Pacific contain 75% of the world’s coral reefs and 17 of its 36 biodiversity hotspots, with ecosystems that provide food, fresh water and livelihoods for more than 4.7 billion people.

The Asian Development Bank is expanding its efforts to bring private investment into nature conservation and restoration, announcing a new bond, a project incubator and a joint report on how development banks track nature finance. The initiatives were unveiled at COP17, the Convention on Biological Diversity meeting in Yerevan, where ADB is chairing the MDB Nature Heads Group. ADB President Masato Kanda said nature underpins economies and communities, and protecting it deserves investment on the scale of other essential infrastructure.

Asia and the Pacific contain 75% of the world's coral reefs and 17 of its 36 biodiversity hotspots, with ecosystems that provide food, fresh water and livelihoods for more than 4.7 billion people. Those resources face increasing pressure, as the global financing shortfall for protecting and restoring nature is estimated at $1.3 trillion a year. The new initiatives are designed to help turn conservation needs into projects that can attract financing.

The MDB report sets out how development banks are tracking nature finance and incorporating nature into investment strategies and results frameworks. It draws on shared principles, a common nature taxonomy and guidance on results metrics to improve accountability and clarify how development finance supports nature.

Building projects that can attract private capital

ADB's Nature Bond Incubator will help governments and businesses develop conservation and restoration projects that can attract investors. It will offer technical advice on project development, bond structuring and investor engagement, helping prepare projects for capital markets. The incubator is part of ADB's Nature Solutions Finance Hub, which seeks to generate at least $5 billion in nature financing by 2030.

The effort builds on ADB's support for Thailand's $750 million sustainability-linked bond, issued in September with a nature conservation target. The bond links Thailand's borrowing to commitments that include conserving and managing at least 30% of its land and inland waters by 2030. ADB presents the transaction as an example of how bonds can connect financing with measurable nature goals.

A new bond will finance nature-positive projects

ADB has issued a three-year Biodiversity and Nature Theme Bond worth about $50 million, arranged by Crédit Agricole CIB. It is the bank's second bond of this type since 2024 and was issued under its Theme Bonds for Sustainable Development program. Proceeds will support projects that conserve and restore ecosystems and reduce biodiversity loss.

Eligible work includes nature-based solutions in agriculture, water management, coastal resilience and urban development. These investments can help protect coastlines, farmland and water supplies that communities and businesses rely on. The bond and incubator are intended to help direct more private capital toward nature protection and restoration.