The Government of Canada and the Asian Development Bank (ADB) have launched a CA$360 million ($255 million) fund to invest in climate- and nature-based projects.
Canada is providing CA$350 million for the fund, dubbed The Canadian Climate and Nature Fund for Private Sector in Asia (CANPA), with another CA$10 million for technical assistance, while ADB will administer CANPA.
The fund aims to lower the risks in bringing viable projects to market that would be unlikely to proceed solely on a commercial basis, ADB said in a statement. It will finance nature-based solutions such as sustainable agriculture and aquaculture to protect, manage, and restore ecosystems.
CANPA also aims to promote gender equality in the region by supporting women and girls’ engagement in a just transition.
“CANPA will help accelerate the region’s transition to low carbon and climate-resilient growth by lowering financing risks and making projects more commercially bankable, with a specific emphasis on empowering women and girls,” said ADB’s vice president for market solutions Bhargav Dasgupta.
Asia Pacific (APAC) is responsible for more than half of global greenhouse gas emissions. It is susceptible to the most destructive effects of climate change, including damage from extreme weather, prolonged droughts, and flooding. More than 60% of the region’s population works in sectors most at risk from climate change.
The Canadian government and ADB have worked together in previous projects to address the climate change issue in APAC, including the Canadian Climate Fund for the Private Sector in Asia (CFPS) in 2013 and CFPS II in 2017.
These funds have backed renewable energy, water supply, agriculture value chain, tourism and affordable green housing projects in countries such as India, Indonesia, Vietnam, Cambodia, Bangladesh and others.
ADB itself is raising a $200-million new fund to back climate-focused startups in Asia, through its venture capital arm ADB Ventures.
A lot of other impact investors are also in the market seeking capital for their climate mandate in Asia, such as responsAbility Investments, which is raising a $500-million vehicle for the region, and Actis, which is targeting $500-600 million for its Actis Asia Climate Transition LP.