The Asian Development Bank has announced a nature solutions financing hub for the Asia-Pacific region aiming to attract at least $2 billion, with a number of other institutions and organisations expressing interest in participating.
“Nature is a critical carbon sink with forest and land ecosystems as well as oceans absorbing around 55% of carbon dioxide emissions,’ ADB President Masatsugu Asakawa said in an announcement Monday on the sidelines of COP28.
“It is vital to protect nature in our battle against climate change. The Asia and the Pacific region, where nature loss threatens two-thirds of GDP, is particularly vulnerable, and hence the hub is a much-required platform for bringing technical and financing solutions to this theme in the region.”
While the initiative is led by the ADB, several others joined the launch, having expressed interest in providing financial or technical expertise.
Those include the OPEC Fund for International Development, the French Development Bank, the Saudi Fund for Development, ASEAN Catalytic Green Finance Facility, the IUCN, The Nature Conservancy, WWF, Birdlife International, and Conservation International.
“Nature-based solutions are features incorporated into the design of projects – both traditional infrastructure and direct nature-conservation projects – that protect, manage, and restore natural ecosystems while still enabling a country or community’s growth, a win-win for biodiversity and people,” the ADB said.
“Restoring mangroves and reforesting wetland areas, for example, can restore biodiversity, protect natural habitats, absorb carbon, improve resilience to climate change, and shore up food security and ecotourism for local communities.”
The new hub will aim to spend around $1 bln on de-risking, for example by providing guarantees, impact-linked payments, and blended finance options for nature-based projects across the region.
“The hub aims to provide integrated activities that will support both upstream awareness, policy, and capacity building for nature-based solutions projects, and downstream innovative finance structuring in projects to directly attract funds via bonds, from banks, and others,” the ADB said.
“For instance, using guarantees to reduce revenue risk in a nature-based solutions project could raise more capital from a nature bond than might otherwise happen.”
The bank plans to provide some $100 bln in total climate finance over 2019-30, and in Dubai announced a $10-bln package for the Philippines this decade, which will include funding for flood management, resilient coastal development, and food security.
By Stian Reklev in Dubai – stian@carbon-pulse.com
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