Keynote address by Bhargav Dasgupta, ADB Vice-President (Market Solutions), at the Asia Infrastructure Forum 2024, 5 June 2024, Singapore

Minister Indranee, regional government officials, ladies and gentlemen, good morning and welcome. It is a pleasure to join you all for this year’s Asia Infrastructure Forum under the theme “Speeding up the scaling of Asia’s energy transition”.

I want to thank Infrastructure Asia for organizing this forum on sustainable infrastructure, which remains at the top of the agenda of governments, MDBs/DFIs, and the private sector, as we work together to achieve net zero under a post-pandemic backdrop.

The urgency for climate action and net zero

Climate change is here, and the clock is ticking for us to tackle this crisis. Last year was the hottest year on record for the past 2,000 years. We are seeing climate change affect us across many dimensions, from deadly heatwaves to changes in water supply; from food insecurity to new emerging threats to public health. The list goes on.

This is a battle for survival of the planet. To win this battle, we must reduce our reliance on fossil fuels and reach net zero by mid-century, in line with the targets set under the 2015 Paris Agreement.

Decarbonizing Asia and the Pacific while ensuring strong, sustainable, and inclusive economic growth remain paramount. Thus, the future of infrastructure will be shaped by how we make greenfield infrastructure sustainable and brownfield infrastructure climate-resilient.

The sustainable infrastructure financing need and key challenges

The road to net zero does not come without cost. Developing Asia will need to invest $3.1 trillion annually in sustainable infrastructure to achieve net zero.

Several challenges stand in the way. One, governments in the region are fiscally constrained, and we need to support them in investing in capital-intensive sustainable infrastructure projects. Two, while we need the private sector to finance this, the private sector requires policy stability and bankability of projects to invest their capital. Three, while philanthropic capital and blended finance can help bridge this bankability gap, the amount of such capital needed may be much more than what is available, and we need to find market solutions. Sustainability and the transition to net zero are our collective responsibility and we need all parties to collaborate.

We need governments, MDBs/DFIs, and the private sector to work together to finance this transition.

Opportunities and impact of the transition on financial and economic sectors

While the transition to net-zero is fraught with challenges and requires massive capital, it also presents substantial opportunities in new technologies, new financial products, and new markets.

So, what are we doing at ADB?

ADB as a regional partner for sustainable infrastructure financing

As Asia and the Pacific’s climate bank, we are redoubling efforts with our partners to deliver on the financing needed for the transition.

ADB has pledged $100 billion over the next decade to fund the Sustainable Development Goals and support infrastructure investments.

We are also pleased to have renewed our Memorandum of Understanding with Infrastructure Asia two years ago, further expanding the Innovative Finance Lab and boosting the development of green infrastructure projects through the ASEAN Catalytic Green Finance Facility (ACGF). Our joint efforts helped mobilize almost $2 billion in cofinancing and technical assistance for green infrastructure projects in the region.

With the Japan International Cooperation Agency, ADB launched the Leading Asia’s Private Infrastructure Fund 2 (LEAP 2), with capital up to $1.5 billion. This fund follows the success of the initial LEAP 1 fund initiated in 2016, and provides cofinancing for high-quality, climate-resilient, and sustainable infrastructure projects.

With a $25 million seed capital from Bloomberg Philanthropies and Goldman Sachs for the Climate Innovation and Development Fund (CIDF), we have unlocked approximately $500 million in climate investments in emerging markets. This is a testament that blended finance can create significant leverage to crowd in private capital. The public and private sector need to continue working together to scale these sustainable solutions.

Through the Asia Pacific Project Preparation Facility (AP3F), we have partnered with the Governments of Australia, Canada, Japan, and Korea to help DMCs structure sustainable infrastructure projects through Public-Private Partnership modalities. With this multi-donor trust fund, we have supported over 79 projects in 24 countries and have unlocked $3.9 billion in commercial investments.

Through our Energy Transition Mechanism (ETM), ADB is supporting groundbreaking efforts of our DMCs, including Indonesia and Philippines, for the managed phase out of coal fired power plants in the region. Our Memorandum of Understanding with the Monetary Authority of Singapore and Global Energy Alliance for People and Planet (GEAPP) announced recently at COP 28 will solidify our efforts to establish the transformational transition finance platform for ETM.

ADB is spearheading the Innovative Financing for Climate in Asia and the Pacific (IF-CAP), which mobilizes climate finance at scale, targeting up to $2 billion in guarantees, at leverage of up to 5:1.

ADB is working closely with the Green Climate Fund (GCF) and renewed the ‘Accreditation Master Agreement (AMA)’ in 2023. GCF has approved a total funding of $1.237 billion for 14 ADB projects to date.

With ADB Ventures, we aim to crowd in more than $1 billion in risk capital by 2030 for early-stage climate and impact-focused companies.

Closing and call to action

In summary, if we are to successfully transition to net zero and meet our SDG commitments, we need strong collaboration among different actors, from governments to the private sector. No one actor can fund the transition and the region’s sustainable infrastructure needs. We need governments, MDBs, and the private sector to work with each other.

I want to end by encouraging you all to engage, discuss, and collaborate with each other throughout this event and beyond. Together, let’s catalyze the next generation of sustainable infrastructure for a greener, more prosperous, inclusive, resilient, and sustainable Asia and the Pacific. The time to act is now. We need all hands-on deck. Thank you very much.