The Asian Development Bank (ADB)?launched the Innovative Finance Facility for Climate in Asia and the Pacific program to enhance support for the region in the battle against climate change

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The landmark Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP) program of the Asian Development Bank (ADB)?aims to take bold action against climate change.

ADB President Masatsugu Asakawa believes the program will have a real impact on the financing of climate-related projects in the region. Expected?$3 billion in guarantees for ADB’s sovereign loan portfolios will hopefully create up to $15 billion in new loans from IF-CAP’s initial partners. These are Denmark, Japan, the Republic of Korea, Sweden, the United Kingdom, and the United States.

Those partners discuss providing a range of grants for the project preparation as well as guarantees for parts of ADB’s sovereign loan portfolios. Due to the given guarantees, the project will have?reduced risk exposure, allowing ADB to free up significant capital and accelerate new loans for climate projects.

A leveraged guarantee mechanism for climate finance is new for the multilateral development bank, which is ADB. As expected, IF-CAP financing will contribute to ADB’s ambitious goal of investing $100 billion from its own resources towards the battle against climate change during 2019–2030.

Besides securing initial partnerships with national financial bodies, ADB is also in discussions with more potential partners, including bilateral and multilateral sources, the private sector, and philanthropies (e.g. the Global Energy Alliance for People and Planet), to further catalyze climate investments.