ADB expands climate lending with US, Japan guarantees

The Asian Development Bank (ADB) announced a $7.2 billion boost in climate lending, backed by the United States and Japan, which will provide the first-ever sovereign guarantees for climate finance.

This framework aims to unlock additional funding for climate projects across Asia and may serve as a model for other development banks as COP29 opens on Monday in Baku, Azerbaijan, focusing on climate financing for developing nations.

Under the plan, the US will guarantee $1 billion of ADB’s existing loans, with Japan covering $600 million, allowing the ADB to fund new climate projects. One of the first to benefit will be a sustainable aviation fuel initiative in Pakistan.

This expanded lending aligns with ADB’s goal of providing $100 billion for climate projects from 2019 to 2030 and is part of a broader shift to leverage both public and private sector funds to meet the rising demand for climate finance in developing nations.

Attribution: Reuters

Subediting: M. S. Salama