ADB's Private Sector Operations Boost Support For Climate Action, Food Security
Umer Jamshaid Published May 03, 2023 | 06:36 PM
The Asian Development Bank's (ADB) private sector operations in 2022 saw project commitments reach $1.1 billion with the percentage of projects receiving climate finance double the level of 2021, according to ADB's Private Sector Operations in 2022 Report on Development Effectiveness
ISLAMABAD, (UrduPoint / Pakistan Point News - 3rd May, 2023 ):The Asian Development Bank's (ADB) private sector operations in 2022 saw project commitments reach $1.1 billion with the percentage of projects receiving climate finance double the level of 2021, according to ADB's Private Sector Operations in 2022 Report on Development Effectiveness.
The report, prepared by ADB's Private Sector Operations Department (PSOD), cites a number of landmark projects that received climate-related financing, including ADB's first private sector renewable energy investment in Azerbaijan; a first wind power project in Uzbekistan; and assistance to develop a fleet of electric ferries in Thailand, which is a pioneering initiative in Southeast Asia.
ADB's 2022 private sector operations also scaled up support for agribusinesses amid strained global food systems and in line with the bank's goal of expanding assistance to ease food insecurity.
This includes the first project under the Asian Development Fund � Private Sector Window facility, which will help an animal feed producer expand operations in Cambodia, and the first-time use of a sustainability-linked financing agreement in India to boost climate-resilient fishing practices.
Other investments were committed to the development of sustainable blue economies, health care, information and communications technology, sustainable transport, water and other urban infrastructure and services, and PSOD's first energy efficiency project in the industry and trade sector since 2012.
"ADB's private sector investments helped its developing member countries directly address climate change and food security, while helping small businesses to revive their operations in the wake of the COVID-19 pandemic," said ADB Vice-President for Private Sector Operations and Public�Private Partnerships Ashok Lavasa.
In addition, many landmark projects demonstrated PSOD's ability to provide finance to small businesses owned or led by women.
Of the 37 new projects committed in 2022, 81% directly promote gender equity and mainstreaming.
The commitments are expected to benefit 578,778 micro, small, and medium-sized enterprises (MSMEs), 355,008 of them owned or led by women. Meanwhile, the energy projects are expected to generate 2,561 gigawatt-hours (GWh) of electricity, while avoiding 1.5 million tons of greenhouse gas emissions annually. Agribusiness investments will reach 109,168 farmers.
ADB continued to work closely and effectively with other financial institutions to mobilize private financing, particularly for clean energy and sustainable transport. The bank mobilized $7.1 billion in non-sovereign co-financing, and together with private institutions established its first philanthropic fund, the Climate Innovation and Development Fund that will invest in private sector projects promoting sustainable low-carbon development in South Asia and Southeast Asia.
ADB also signed an agreement with leading global insurers that will provide $1 billion in insurance coverage for the risk of nonpayment on a portion of ADB loans to private sector financial institutions, thus helping the bank improve lending efficiency.
ADB's Trade and Supply Chain Finance Program (TSCFP) and the Microfinance Program help fill gaps in trade and supply chain funding and support the growth of MSMEs, and in 2022 they recorded over 10,200 transactions valued at over $8 billion. The TSCFP helped secure imports of critically important goods to Sri Lanka and launched efforts to track and report carbon emissions throughout supply chains.
ADB's active portfolio of private sector projects has delivered benefits to 47.5 million MSMEs that are mostly owned or led by women, as well as to about 10 million farmers. Current operations have generated employment for 592,047 workers, 123,645 of them female. On energy, the portfolio has delivered 44,062 GWh a year and reduced up to 28.8 million tons of greenhouse gas emissions.
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