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ADB debuts Asia nature financing hub at COP28
Initiative aims to raise US$2 billion of private capital for nature-based, blended solutions
The Asset 5 Dec 2023

At COP28 in Dubai, the Manila-headquartered Asian Development Bank (ADB), together with a number of partners, has launched a Nature Solutions Finance Hub for Asia and the Pacific, which aims to raise at least US$2 billion for investment programmes that incorporate nature-based solutions by focusing on capital markets and other sources of private capital.

Nature-based solutions, according to the ADB, are features incorporated into the design of projects  both traditional infrastructure and direct nature-conservation projects  that protect, manage and restore natural ecosystems and biodiversity while still enabling a country or community’s growth.

For example, restoring mangroves and reforesting wetland areas, can restore biodiversity, protect natural habitats, absorb carbon, improve resilience to climate change and bolster food security while also boosting ecotourism for local communities in Asia.

The new hub, the multilateral development lender notes, expects to implement a range of new and innovative financing measures to reduce risks in nature-based solutions projects, such as guarantees, impact-linked payments and blended finance options. For example, it says using guarantees to reduce revenue risk in a nature-based solutions project could raise more capital from a nature bond than might otherwise be the case.

The regional development institution is targeting about US$1 billion in such de-risking funds from global development partners and is already in advanced discussions with several entities.

Among the partners that have expressed interest in supporting the hub through financing or technical expertise are the OPEC Fund for International Development, Agence Française de Développement, the Saudi Fund for Development, the Asean Catalytic Green Finance Facility, the International Union for Conservation of Nature, Nature Finance, The Nature Conservancy, Worldwide Fund for Nature, Birdlife International, and Conservation International. 

“It is vital to protect nature in our battle against climate change,” says Masatsugu Asakawa, the ADB’s president. “The Asia and the Pacific region, where nature loss threatens two-thirds of GDP, is particularly vulnerable, and hence the hub is a much-required platform for bringing technical and financing solutions to this theme in the region.”

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