The Asian Development Bank (ADB) unveiled its groundbreaking Nature Solutions Finance Hub for Asia and the Pacific at COP28, aiming to mobilize a minimum of USD 2 billion in investment programs incorporating nature-based solutions.
As per ADB, this initiative, focused on capital markets and private capital sources, aligns with ADB's commitment to combat climate change and protect the region's biodiversity.
ADB President Masatsugu Asakawa emphasized the critical role of nature in mitigating climate change, with forests, land ecosystems, and oceans absorbing approximately 55 per cent of carbon dioxide emissions.
The Asia-Pacific region, facing significant nature loss that threatens two-thirds of GDP, is particularly vulnerable.
The Nature Solutions Finance Hub emerges as a crucial platform, bringing technical and financial solutions to address this pressing theme in the region.
The initiative has garnered support from esteemed partners like the OPEC Fund for International Development, Agence Francaise de Developpement (AFD), the Saudi Fund for Development, ASEAN Catalytic Green Finance Facility, the International Union for Conservation of Nature, Nature Finance, The Nature Conservancy, Worldwide Fund for Nature, Birdlife International, and Conservation International.
Nature-based solutions, incorporated into project designs, protect, manage, and restore natural ecosystems while facilitating growth for communities--a harmonious balance benefiting both biodiversity and people.
Examples include restoring mangroves and reforesting wetlands, contributing to biodiversity conservation, carbon absorption, climate resilience, and enhancing food security and ecotourism for local communities.
Razan Al Mubarak, UN Climate Change High-Level Champion for COP28 and President of the International Union for Conservation of Nature stressed the urgency of global collaboration to scale up nature-based solutions.
The global call to conserve 30 per cent of the Earth's lands, oceans, and coastal areas necessitates swift action to restore degraded inland waters and marine ecosystems.
The Nature Solutions Finance Hub aims to support both upstream activities like awareness, policy, and capacity building for nature-based projects, and downstream finance structuring to attract funds via bonds, banks, and other channels.
Using guarantees to reduce revenue risk in nature-based projects, the hub seeks to raise capital from bonds more effectively.
To minimize risks in nature-based projects, the hub plans to deploy various financing measures, including guarantees, impact-linked payments, and blended finance options.
The target is to secure around USD 1 billion in de-risking funds from global development partners, with advanced discussions already underway with several entities.
OPEC Fund Director-General Abdulhamid Alkhalifa expressed the importance of cooperation between governments and development agencies, emphasizing the OPEC Fund's commitment to supporting the initiative.
The OPEC Fund, with a Climate Action Plan aligned with global efforts, stands as the only globally mandated development institution providing financing from member countries to nonmember countries.
As Asia and the Pacific's climate bank, ADB strives to provide USD 100 billion in climate financing from its own resources from 2019 to 2030.
In 2022, ADB committed USD 7.1 billion to climate finance, including substantial amounts for both mitigation and adaptation, along with mobilizing an additional USD 548 million from the private sector.
The launch of the Nature Solutions Finance Hub marks a significant stride in ADB's commitment to a prosperous, inclusive, resilient, and sustainable Asia-Pacific, reinforcing efforts to eradicate extreme poverty since its establishment in 1966, with ownership by 68 members, 49 from the region. (ANI)