Page 291 - Ebook HTKH 2024

wary of investing in green infrastructure projects because investing in green
infrastructure often entails large initial costs and high risks.

The ASEAN region is estimated to need US$ 3.1 trillion (equivalent to US$ 200
billion a year) in the period from 2016 to 2030 to invest in infrastructure to adapt to
climate change. However, countries in the region still lack more than US$ 100 billion a
year for this goal. Therefore, mobilizing and combining financial resources plays a very
important role in Southeast Asia's growth and recovery, particularly after Covid-19.
In 2021, Asian Development Bank and major development donors launched an
initiative to promote more than US$ 1 billion of investment in infrastructure
development projects in 10 ASEAN member countries. Of the US$ 1 billion, US$ 336

million comes from Germany's KfW State Bank, about US$ 300 million is funded by
ADB. The European Investment Bank and the French Development Agency contributed
US$ 168 million and US$ 75 million was provided by the ASEAN Infrastructure Fund.
In addition to financial support, the new initiative will also provide support for
knowledge sharing and “green” finance capacity building.
The ASEAN Catalytic Green Finance Fund (ACGF)—an initiative of the ASEAN

Infrastructure Fund—was launched in April 2019 to accelerate green infrastructure
investments in Southeast Asia. The ACGF provides ASEAN member governments with
technical assistance and access to over $1 billion in loans from co financing partners.
The ACGF’s technical assistance supports governments to identify and prepare
commercially viable green infrastructure projects while the ACGF loans are utilized to
cover upfront capital investment costs. This two-pronged approach “de-risks” green
infrastructure projects, making them more attractive to private capital investors.

To support the ACGF Catalytic Green Finance Fund, four partners have committed
US$ 665 million to the Fund managed by the Asian Development Bank with the goal of
mobilizing US$7 billion for infrastructure projects, low carbon emissions and climate
resilience in Southeast Asia, accelerating the region's recovery from COVID-19. These
four partners include: US$ 151 million from the UK Government; US$ 155 million from
Italian State Investment Bank Cassa Depositi Prestiti (CDP); nearly US$ 60 million

from the European Union and US$ 300 million from the Green Climate Fund. This new
capital will supplement the co-financing budget of US $1.4 billion that has been
committed to ACGF since 2019, bringing the total commitment to the Fund to US$ 2
billion.
To be funded under ACGF, projects must be sovereign or guaranteed by the state
and meet eligibility criteria, including: First, the project must have clear environmental
goals and targets; Second, the project must have a sustainable financial plan; Third, the
project must have a roadmap to attract private investment capital.

ACGF Fund's capital focuses on projects promoting renewable energy, efficient
energy use, sustainable urban transportation, water supply, sanitation, waste
management and agriculture adapted to climate change. In addition to project

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