The Australian Government is enhancing its commitment to combat climate change in the Pacific and South-East Asia by providing a guarantee of up to US$200 million (around A$300 million) for climate change lending through the Asian Development Bank (ADB).
This guarantee is set to enable the ADB to unlock over US$900 million in additional loans, which will significantly boost efforts in climate change mitigation and adaptation projects. Australia is joining other nations, including the United States, United Kingdom, and Japan, in endorsing this groundbreaking financial approach aimed at mobilizing climate funds for the region.
Dr Jim Chalmers, said in a statement, “By supporting our partners in the Pacific, we’re making our region more stable and prosperous into the future as we take action on climate change. This is an innovative way for Australia to help our Pacific and other regional partners to deliver more climate projects at a lower cost.”
The guarantee is part of the Innovative Finance Facility for Climate in Asia and the Pacific, a program designed to help the ADB deliver up to US$11 billion in climate-related loans. This facility also aims to increase private sector investment in climate initiatives.
By supporting this program, Australia is providing an efficient and impactful way to address the climate challenges faced by its Pacific neighbors and nearby nations like Indonesia. Notably, the guarantee involves no immediate cash outlay from the budget, making it a cost-effective measure.
Chris Bowew, Minister for Climate Change and Energy, also mentioned, “Australia and our neighbours have the most to gain from strong action on climate change, and the most to lose from denial and delay.
This contribution will unlock private finance to accelerate investment across our region, opening up new trade and export opportunities for Australian businesses, while helping our partners adapt to worsening weather events.”
Josh Wilson, Assistant Minister for Climate Change and Energy, stated, “Climate change presents the single greatest threat to the livelihoods and wellbeing of people everywhere. Our region faces acute challenges, especially the low-lying Pacific atoll states and Asia’s great delta and coastal cities.
There is a strong imperative for Australia to help bridge the climate financing gap through collective initiatives like the IF-CAP so we can protect lives and livelihoods, adapt to worsening threats like sea-level rise, and build regional security.”
