ADB, partner institutions to finance sustainable infrastructure

THE Asian Development Bank (ADB) said it has teamed up with other institutions to set up a debt financing facility supporting sustainable infrastructure projects in Asia, beginning with Southeast Asia.

In a statement Thursday, the bank said it partnered with HSBC Holdings, Singapore investment firm Temasek and Clifford Capital Holdings to establish the new platform that will provide concessional capital.

“The initiative aims to bridge the financing gap by helping countries develop bankable sustainable infrastructure projects based on global standards,” the ADB said.

ADB Vice-President Ahmed M. Saeed said the bank will extend technical assistance in project development and sector reforms, while working with its partners to promote the use of blended finance and other risk mitigation solutions to mobilize resources.

HSBC and Temasek will provide equity with a combined investment of up to $150 million in the initial stage, Reuters reported, while Clifford Capital Holdings will join the ADB as a strategic partner for the program.

The ADB said the facility will first focus on clean transport, renewable energy and energy storage, and water and waste management infrastructure projects, before it explores other areas like climate adaptation, agriculture and land use, and technology-led solutions.

Developing Asia needs to invest $26 trillion or $1.7 trillion each year between 2016 and 2030 to sustain high economic growth, end poverty and address climate change. Southeast Asia remains one of the most exposed regions to climate change.

It said the private sector could help plug the funding gap but 65% of infrastructure projects in the region are not considered bankable, while large upfront costs and long project preparation times are needed before these can be considered viable by creditors.

“Marginally bankable projects typically face a range of barriers to accessing private sector finance. These may include a variety of capability, policy and economic issues which can impact a project’s ability to attract commercial financing,” it said. — Beatrice M. Laforga