Asean nations to benefit from US$134 million UK trust fund

South East Asian nations including Laos are set to benefit from a £107 million (about US$134 million) UK trust fund designed to finance climate-friendly infrastructure and leverage green growth opportunities.
The Asian Development Bank (ADB) and the Government of the United Kingdom have signed a memorandum of understanding to develop the trust fund to support efforts by Asean countries to scale up green financing and shift to low-emission, climate-resilient development.
According to the ADB, the UK-Asean Catalytic Green Finance Facility (ACGF) Trust Fund will leverage UK and ADB funds to accelerate a pipeline of low-carbon and climate-resilient infrastructure projects and catalyse financing from public and private capital sources.
“We are facing a climate crisis and Southeast Asia needs rapid and innovative solutions to help countries raise financing to deliver their climate targets and ambitions,” said ADB President Masatsugu Asakawa.
“This new fund will build on a longstanding UK-ADB partnership through an innovative revolving fund structure that will mobilise public and private funds and build a robust pipeline of climate projects in the region.”
Asean countries are grappling with increasing costs of climate change, which add to the existing investment needs of US$210 billion a year for infrastructure in the region and exacerbate the heightened vulnerability of people and the economy after the Covid-19 pandemic.
“As a trusted partner to Asean, this UK financing delivered through the ADB is imperative to help deliver new honest and reliable green investment - creating jobs and putting UK expertise at the heart of tackling climate change,” said UK Minister for Asia Amanda Milling.
“It’s another step in delivering the UK’s commitments made at COP26 in Glasgow last year.”
In Laos, the government aims to cut greenhouse gas emissions to zero by 2050. In addition, the government plans to increase green spaces to 70 percent of the country’s land area, so that more trees will be planted to absorb the carbon dioxide emitted by industry and other processes.
The fund will leverage financial resources for the Asean Catalytic Green Finance Facility, an ADB-managed regional green financing vehicle, owned by the Asean countries and ADB.
Since its launch in 2019, the ACGF has attracted US$2 billion in cofinancing pledges and included five projects in its formal financing pipeline.
It has helped develop a longer pipeline of 29 green infrastructure projects and provided advisory support that has enabled countries to tap capital markets through the issuance of more than US$5.6 billion in green bonds.
The UK-ACGF Trust Fund will build on these efforts and support countries through loans and technical assistance to mobilise capital, including through regional initiatives such as the Blue SEA (Southeast Asia) Finance Hub, based in Indonesia.

By Times Reporters
(Latest Update July 11, 2022)