With wealthy donor states cash-strapped and facing a hurricane of demands on their limited budgets, one development bank is piloting a new model of raising capital that will let it lend an additional $15 billion for climate projects — without having to ask for huge sums from its rich shareholders.
The Asian Development Bank’s pilot program is seeking $3 billion in pledges, which it would leverage on markets and turn into $15 billion in one-time lending for projects over five years. The money would go toward both reducing carbon emissions and helping its client countries in Asia and the Pacific adapt to a changing climate.
“We have to find a way of being more impactful without necessarily going back to our shareholders and asking for more cash in the current geopolitical environment,” Jacob Sorensen, ADB’s director of the partner funds division, told Devex in an interview.