Feb 16, 2020
Luxembourg: The European Investment Bank (EIB) will invest EUR EUR 150 million to accelerate the development of green infrastructure projects in Southeast Asia.
It will invest the fund in the Catalytic Green Finance Facility (ACGF) established by Association of Southeast Asian Nations` (ASEAN) for finanacing geen infrastructure projects and crowd-in much needed private investments in the sector.
In line with its role as the EU`s Climate bank and its focus on climate action in Asia, the EIB support for ACGF will also improve environmental sustainability and climate resilience of ASEAN member countries, jointly the seventh-largest economy in the world, and advance global climate action.
Luca Lazzaroli, Director General of the EIB, said: “The EIB is ready to support ASEAN attract funding for green infrastructure as it is a true win-win partnership for South East Asia, the European Union and the whole world. Our cooperation will benefit the people and economies of the ASEAN, support local communities by making them more climate resilient and aid the global effort to combat climate change. Partnerships like this one with ASEAN are the only way to ensure success of the global climate action and preserve our planet for future generations.”
The investment from the EU Bank will also support ASEAN meet its own climate action goals and attract much needed private funding for its green infrastructure projects in sectors like energy, transport, water and urban development.
Currently, ASEAN countries attract only 40 out of $200bn required each year for green infrastructure finances, with only 25% of financing from the private sector, mostly as commercial loans. The ACGF will mobilize and catalyse private finances through instruments such as green bonds, and development of commercially bankable projects with attractive risk-return profiles in order to accelerate development of green infrastructure in ASEAN.
With the support from the EIB, ACGF will address these issues to reduce high up-front costs of green infrastructure and introduce new technologies, as well as create long-term finances options for green project developers and address exchange rate volatility that hinders foreign investments in the sector.
ACGF will develop a project pipeline and provide project financial structuring support, both key to attracting private sector investments. It will promote innovative finance approaches, create bankable financial models, and respond to the need for climate-responsive projects in ASEAN countries.
–India News Stream
