ADB to allocate half of its lending to climate finance by 2030 – Times of India

NEW DELHI: The Asian Development Bank on Friday announced a new target to allocate half of its annual lendings to climate finance by 2030. Additionally, the bank also aims to increase private sector capital mobilization as a strategy update for the remaining decade.
The bank said that the new target would be a big leap from the present ambition of 35 per cent and comes with an aim of $100 billion contribution to climate finance between 2019 and 2030, as only $30 billion have been contributed so far.
In an interview with news agency Reuters, ADB strategy director Tomoyuki Kimura said, “We want to be the climate change bank in the region.”
Kimura said that under ADB’s strategy 2030 mid term review, it would focus on tackling five of Asia’s key development issues: climate change, developing robust private sectors, cooperating on public goods such as healthcare, digital transformation and making vulnerable communities more resilient.
Planning its expansion in the private sector development, ADB targets to invest $13 billion to finance private sector projects from 2019 to 2030, which is thrice the current amount of $3.7 billion for that period. The target would be achieved with ADB’s own private-sector lending and funds from partner institutions and other lenders, said Kimura.
It includes a minimum of $4.5 billion in direct private capital mobilization, a major jump from the $1.4 billion since 2019. The lender is working with new types of private sector partners, including investment funds, philanthropies and other institutions.
He added that ADB is now looking forward to deploying the additional lending headroom amid strong demand from client countries. However, constraints to lending volume need to be addressed, including improving the preparation of projects for loan approval.
ADB president Masatsugu Asakawa stated, “Cascading shocks have derailed years of development progress in Asia and the Pacific.”
He added that ADB is updating its vision, focusing on its financial capacity and modernizing its operational approach to help its members respond to these unprecedented challenges.
The news of the new target comes almost a year after ADB permitted reforms to unlock $100 billion in new financing capacity over a decade, meeting a mandate from US Treasury Secretary Janet Yellen for the World Bank and other development banks to expand lending for climate change and other global crises.