Due to the COVID-19 pandemic the countries within the Association of Southeast Asian Nations (ASEAN) have become increasingly vulnerable to the heightening costs caused by climate change. This vulnerability could see these Southeast Asian countries struggling financially as further investment will be needed to make them sustainable. These sustainable investments will be added on to the $210 billion per year already needed for infrastructure within the ASEAN countries.
The UK Government and the Asian Development Bank (ADB) have signed a memorandum of understanding (MOU) to help countries in Southeast Asia to increase their green financing sectors. This MOU is worth £107 million and will be used to help move Southeast Asia towards climate resilient developments that will produce lower emissions.
At COP26, the ASEAN Green Recovery Platform was launched. The funding the ASEAN countries will receive from the UK and the ADB will be a part of this platform, in the form of the UK–ASEAN Catalytic Green Finance Facility (ACGF) Trust Fund.
The ACGF was launched in 2019 and since then they have received many pledges that have totalled $2 billion altogether. This money has already led to the ACGF making plans for 29 green infrastructure projects, as well as five further projects within formal financing.
ADB’s President, Masatsugu Asakawa has stated that “We are facing a climate crisis and Southeast Asia needs rapid and innovative solutions to help countries raise financing to deliver their climate targets and ambitions”.
The UK–ASEAN Catalytic Green Finance Facility (ACGF) Trust Fund has been put into place to help these countries to do this by offering support through loans and technical assistance. Initiatives to assist the mobilisation of capital have already been established such as the Indonesian based, Blue SEA (Southeast Asia) Finance Hub.