Norway pledges $50m to ADB’s climate action catalyst fund

Norway said on Wednesday it is committing up to $50 million to the Asian Development Bank‘s (ADB) Climate Action Catalyst Fund (CACF), a pioneering initiative under Article 6 of the Paris Agreement.

The fund, operational since January, aims to finance mitigation projects in Asia and the Pacific, generating tradable carbon credits under long-term agreements.

The CACF addresses a critical financing gap by offering upfront payments for emissions reduction activities, unlike traditional carbon markets where payments are only made upon credit delivery. The first transactions are expected in 2025.

ADB’s Toru Kubo praised the fund’s potential to send strong market signals, bolstered by COP29 agreements on Article 6.4 standards. Norway’s Ministry of Climate and Environment emphasised the dual benefits of accessing high-quality mitigation projects and promoting low-carbon investments in host countries.

The CACF began with a $27 million contribution from the Swedish Energy Agency and aims to raise over $100 million from governments and private entities. This initiative underscores collaborative efforts to leverage carbon markets for sustainable development in the region.

Attribution: Asian Development Bank (ADB)

Subediting: Y.Yasser