Republic of Korea: The Asian Development Bank (ADB) will continue to maintain a close cooperation with the IMF, World Bank and other partners with regard to Sri Lanka.
The ADB team in Sri Lanka is intensifying its supports to the government’s reform agenda including renewable energy and preparing a budgetary support program by coordinating with the IMF in preparing a special policy based loan (SPBL) up to USD 350 million and preparing policy based loans (PBL) and providing advisory support to advance reforms in finance including banking, power, trade and investment agriculture, tourism, urban development and water, ADB President Masatsugu Asakawa said at the opening press conference of its Annual Sessions here yesterday.
He also asserted that If was a very positive event that Sri Lanka was able to secure the IMF board approval extended fund facility (EFF) arrangement for USD 3 billion and the government has taken some initial policy steps for macro stability which is also encouraging.
Asakawa however noted that the restructuring of Sri Lanka’s external debt will be essential and expressed optimism that the restructuring will happen with full transparency. Although ADB will not be a part of the debt restructuring itself, he said it will be important that all bilateral and private creditors be included in an equitable manner.
He said in recent years, war, disease, and economic hardship have taken a terrible toll on human welfare. The most alarming challenge facing the region is the worsening impact of climate change. This threatens the existence of countless species, including humans.
“Since 2000, more than 40% of climate-related disasters have occurred in Asia and the Pacific. Over 3.5 billion people have been affected, with close to one million deaths. By 2050, another 1 billion people living in urban areas in our region will suffer from harmful air pollution and heat stress. In 2020 alone, the region faced a disaster loss of US$67 billion.”
“If we don’t act, the increase in annual losses will outpace the region’s GDP growth. This is why ADB is taking bold climate action. We aim to deliver $100 billion in climate finance to our developing member countries between 2019 and 2030. This new program is called IF-CAP: (Innovative Finance Facility for Climate in Asia and the Pacific), a global first, transforming climate finance in two ways.”
He said the significance of this innovation is that it is a fundamental shift from the traditional “one dollar in, one dollar out” facilities at MDBs, because of its multiplier effect. We aim to bring in approximately $3 billion for IF-CAP, which can unlock up to $15 billion of new ADB climate projects.
“Second, IF-CAP will change the way we address climate change. Climate change demands innovative and all-encompassing solutions. IF-CAP will provide this. It will be the first ADB financing vehicle to serve as a one-stop shop for climate finance.”
“This will make climate action across sectors and regions possible. This gives us the power to address climate change everywhere, and anywhere, that it is needed.”
ADB unveils IF-CAP to lure billions into climate change financing
The Asian Development Bank (ADB) unveiled the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), a landmark program which could significantly ramp up support for the region in the battle against climate change.
The announcement was made by ADB President Masatsugu Asakawa on the opening day of ADB’s 56th Annual Meeting in Incheon.
“Climate change is the critical issue of our lifetime and here in Asia and the Pacific we are on the frontlines of that battle,” Asakawa said.
“The climate events we have experienced over the past 12 months will only increase in intensity and frequency, so we must take bold action now. IF-CAP is an exciting, innovative program that will have a real impact. And it is another example of how ADB serves as the climate bank for Asia and the Pacific.”
IF-CAP’s initial partners are Denmark, Japan, the Republic of Korea, Sweden, the United Kingdom, and the United States.