MANILA, PHILIPPINES: The Green Climate Fund (GCF) today approved $100 million in funding for an Asian Development Bank (ADB) project in Shandong province in the People’s Republic of China (PRC) that will showcase new ways to mobilize private, institutional, and commercial financing for climate change mitigation and adaptation. This is the first GCF funding for the PRC.
The project will establish the Shandong Green Development Fund (SGDF), which will catalyze climate finance for a variety of climate subprojects. The fund will apply GCF’s Investment Framework and leverage transformational investments in Shandong with strong climate benefits. ADB approved €88.73 million ($100 million) of loans for the SGDF Project on 26 September. Germany’s KfW is providing additional cofinancing while France’s Agence Française de Développement will present the cofinancing opportunity to its board for approval in December.
Shandong province in the eastern part of the PRC has a population of just under 100 million and is the second most populous province in the country. Its carbon-intensive economy has resulted in high greenhouse gas emissions. The SGDF will function as the financial arm of the provincial government to support its ambitious climate change targets and attract private investors to climate change projects. The significant reduction in greenhouse gas emissions reduction will have a positive impact beyond the PRC.
“Many parts of the PRC and other Asian countries face similar challenges to Shandong. We are confident that this project will have a strong demonstration value on how Asian economies can shift to a low-carbon and sustainable growth trajectory,” said ADB Director General for East Asia Ms. Amy Leung. “The fund will pilot new ways to attract private sector funding and know-how that can be replicated elsewhere.”
GCF approved the funding at its 24th Board meeting on 12–14 November. GCF, based in Songdo, Republic of Korea, is a global fund created to support the efforts of developing countries to respond to the challenge of climate change. It was established in 2010 by 194 governments to limit or reduce greenhouse gas emissions in developing countries and catalyze a flow of climate finance to invest in low-emission and climate-resilient development. ADB has been an accredited entity of the GCF since 2015 and has received 10 funding approvals totaling $473 million since then.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.