Innovative Finance Facility for Climate in Asia and the Pacific launched at the ADB Annual Meeting

IF-CAP is a landmark program that is expected to significantly galvanize support to fight climate change in the region. Initial partners, Denmark, Japan, the Republic of Korea, Sweden, the United Kingdom, and the United States are in discussions with ADB about providing a range of grants for project preparation along with guarantees for parts of ADB’s sovereign loan portfolios. The grants would help reduce risks and will allow ADB to free up capital to accelerate new loans for climate projects. With a leverage ratio of 1:5, the initial ambition of $3 billion in guarantees could create up to $15 billion in new loans for much-needed climate projects across Asia and the Pacific. It is the first time for any multilateral development bank to adopt a leveraged guarantee mechanism for climate finance.

IF-CAP financing will help ADB achieve its raised ambition for $100 billion from its own resources for climate change from 2019–2030. ADB is also in discussions with other potential partners—such as bilateral and multilateral sources, the private sector, and philanthropies, including the Global Energy Alliance for People and Planet—to catalyze climate investments.