The Green Climate Fund (GCF) has allocated US$300 million to support efforts by the Asian Development Bank (ADB) to help Southeast Asia shape a climate-resilient, environmentally sustainable economic recovery from the Covid-19 pandemic.

The Association of Southeast Asian Nations Catalytic Green Finance Facility’s (ACGF) Green Recovery Programme aims to leverage GCF and ADB funds to support more than US$4 billion worth of green infrastructure projects across the region. All projects supported by the programme will incorporate innovative green finance instruments and approaches.

“The ACGF Green Recovery Programme is designed to kickstart a cycle of low-emissions investments during the first few years of a Covid-19 recovery,” says ADB vice president Ahmed M. Saeed. “The programme will help Southeast Asian countries design green stimulus packages and projects that will create climate-friendly jobs, boost economic growth, and help countries fulfill their pledges under the Paris Agreement to reduce greenhouse gas emissions.”

The programme aims to help Southeast Asian countries bridge a major gap in financing green infrastructure, with the region’s annual investment needs estimated to be US$210 billion even before the Covid-19 outbreak. The gap is likely to have widened during the pandemic, as the region’s economy contracted by 4.4% in 2020, according to ADB.

The programme will provide technical assistance and concessional loans to about 20 green infrastructure projects across Southeast Asia. Over a 30-year period, the projects are expected to reduce carbon dioxide emissions by 119 million tonnes and create 340,000 green jobs in key sectors such as sustainable transport, renewable energy and energy efficiency systems, as well as low-carbon agriculture and natural resources.

“The programme seeks to accelerate the flow of green capital from banks, investors, and capital markets to Southeast Asia by helping de-risk and prepare bankable green infrastructure investments,” ADB’s ACGF unit head Anouj Mehta says, adding that it will also help countries scale up issuances of green and climate bonds to support sustainable growth in the region.

The Green Recovery Programme will be implemented according to the principles of ACGF, established by the ASEAN Infrastructure Fund and managed by ADB. ACGF has published a set of green investment principles and eligibility criteria and created a pipeline of projects, including its first project approved for financing in 2020.

 ACGF has attracted more than US$1.4 billion in co-financing commitments, which will support the Green Recovery Programme. ADB will prioritize the use of GCF funding under the program for investment projects in Cambodia, Indonesia, the Lao People’s Democratic Republic, and the Philippines.

GCF approved the funding for the programme at its 28th board meeting on  March 19 2021. Based in Songdo, South Korea, GCF is a global fund created to help developing countries address the challenge of climate change. ADB has received 12 funding approvals totalling US$948 million since becoming an accredited GCF entity in 2015.