ADB assures support for critical reforms

Bank president announces innovative climate finance facility

SEOUL:

Acknowledging the quick stabilisation measures taken by Pakistan to put the national economy back on track, Asian Development Bank (ADB) President Masatsugu Asakawa on Tuesday assured the bank’s continued support for the government’s critical and structural reforms.

Addressing a press conference at the ADB Board of Governors’ 56th annual meeting in Incheon, the bank president said Pakistan was taking “quick” required stabilisation measures by containing spending, enhancing tax revenues and improving financial sustainability of the energy sector.

He said the ADB was supporting those policy measures that would definitely improve economic condition of the country and help improve fiscal space for enhancing social protection transfers.

“The bank would continue supporting Pakistan through policy-based lending operations to help improve the economy and financial position”.

The ADB was aimed at delivering $100 billion in climate finance to the developing member countries between 2019 and 2030, expand its investments in renewable energy options, and “we will not invest in coal,” he added.

Asakawa announced a new programme named IF-CAP: the Innovative Finance Facility – for Climate in Asia and the Pacific, terming the plan “a global first in its scale and scope.”

“It would change the way we do business,” he elaborated. The region needed trillions (of dollars) in investment to combat climate change and to help reach that level, there was need to maximise capital in new ways, he said.

IF-CAP will multiply ADB’s lending capacity through leverage and will allow crowding in substantially more resources from the private sector, and other investors who share bank’s commitment to climate action.

The programme was based on the use of financial guarantees from ADB partners, adding by guaranteeing a portfolio of the bank’s sovereign loans, they would help shoulder some of the loss in case of a credit event by a borrower.

Published in The Express Tribune, May 3^rd, 2023.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.