ADB executive: More scalable ideas needed for climate finance

A lot of experimentation is taking place to offer solutions for climate-related and other issues, but they need to be scaled up, a senior executive from the multilateral development bank told AsianInvestor.
ADB executive: More scalable ideas needed for climate finance

Institutional investors are keen to participate in blended finance projects, including for climate-related projects, although more scalable ideas are needed to deploy capital, a senior executive at Asian Development Bank said.

“There is a lot of ideas and experimentation, but we need to see how we can scale some of these ideas,” Bhargav Dasgupta, vice president – market solutions, Asian Development Bank, told AsianInvestor.

Dasgupta, who took on the role in December 2023, was previously CEO of ICICI Lombard General Insurance, the largest non-life insurance company in India.

Bhaskar Dasgupta

The former insurance executive noted that while the focus of the ADB is to ensure it helps Asia and the Pacific grow in a sustainable and inclusive manner, one of the key areas of focus right now is climate.

Several institutions, from insurance companies to pension funds to sovereign wealth funds, have said they are committing to net-zero goals.

Entities such as British insurer Prudential have also said they want to work with multilateral development banks on blended finance projects to help Asia in its decarbonisation journey.

Large environment-focused asset owners such as The Nature Conservancy and the Green Climate Fund are also looking to invest in blended finance projects for nature-based solutions and climate-action projects.


However, challenges in finding investment opportunities remain.

Dasgupta acknowledged there are challenges to decarbonisation, which can be very specific and contextual to individual projects.

“If you consider some older assets, such as coal-fired plants, it’s an expensive proposition to decarbonise. Similarly in the climate adaptation space, we need a lot more scalable solutions to pull more capital in,” Dasgupta said.

Blended finance --  the strategic use of development finance to mobilise additional commercial investments to help solve socio-economic challenges faced by developing nations -- can help.

“There is an interest on both the demand and supply side [for blended finance], so we need to find ways to bring both sides together,” he added.

“There is local market mapping done in terms of projects and there is an opportunity for working with some of these sources of capital to make the projects more viable for current sponsors.”


Dasgupta also noted that ADB is keen to work with philanthropic entities “because they play a crucial role in blended finance.”

Philanthropic foundations tend to provide capital with a greater focus on socio-economic impact and are less concerned about financial returns. This allows them to take risks that other conventional investors might balk at.

One of Hong Kong's well-known philanthropists, James Chen, told AsianInvestor previously that wealthy families could adopt a more venture capital-like approach to philanthropy by funding innovative yet untested solutions to market challenges.

It’s an approach ultra-high net worth individuals and wealthy families can afford to take as they can take high risks on ideas that haven't become mainstream yet, he noted.

Such investments can fuel the development of a project to a point where it can scale up, thus attracting more conventional investors such as the government and private sector.


In the quest to promote blended finance and accelerate decarbonisation in Asia, ADB, Monetary Authority of Singapore and Global Energy Alliance for People and Planet in December 2023.

“The platform can obviously help with developing those opportunities,” Dasgupta added.

This is one among many other climate-related initiatives that ADB participates in as it seeks to create more commercially viable projects for both ADB and private investors.

Dasgupta noted that there is a lot that can be done [in terms of climate financing] in some of the more challenging markets, such as the Pacific islands and the small island developing states.

The development bank has previously stated it aims to provide $100 billion in cumulative climate financing by  2030.

This includes about $12 billion in cumulative private sector climate finance from its own resources.

Investable decarbonisation opportunities that can be monetised and have an impact are slowly emerging, especially in Southeast Asia, a newly launched report co-authored by Temasek said.

The report identified 13 decarbonisation ideas for Southeast Asia, representing economic opportunities of up to $150 billion.

The 13 ideas cut across a range of sectors from nature and agriculture to power, industrial and waste, buildings, and transportation and include investment areas like regenerative and precision agriculture, utility-scale solar and wind power, forest, and peatland conservation etc.

The report was co-authored by Temasek and its climate investment platform GenZero, Bain & Company, and Standard Chartered.

This story has been updated in paras 5 and 6 under the Decarbonisation Initiatives section.

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