On January 18, a new collaboration was unveiled between the Asian Development Bank (ADB) and British International Investment (BII), the United Kingdom’s development finance institution and impact investor. This partnership aims to fund up to $100 million in green trade transactions, starting with initiatives in Vietnam.
The collaboration will be administered through ADB’s Trade and Supply Chain Finance Programme (TSCFP), concentrating on renewable energy, energy efficiency, and climate-smart agriculture. Its goal is to bolster the energy transition and climate resilience in South and Southeast Asia.
South and Southeast Asia, being among the regions most susceptible to climate change, require an increase in renewable energy capacity to meet sustainability targets.
Trade plays a pivotal role in this context, facilitating the movement of goods essential for regions to adapt and mitigate the impacts of climate change. However, a significant global trade finance gap of $2.5 trillion annually hampers businesses’ access to financing crucial for trading energy transition goods for climate projects.
Additionally, local banks struggle to meet the demands for extended tenors required to finance climate-related projects, especially within the renewable energy sector.
The BII-ADB Green Trade Finance Facility aligns with the UN’s Sustainable Development Goal (SDG) 7 on affordable and clean energy and SDG 13 on climate action. Freddie Tucker, Investment Director of Trade and Supply Chain Finance at BII, spearheaded the transaction.