12 Things to Know about the ASEAN Catalytic Green Finance Facility (ACGF)

Southeast Asia faces an infrastructure investment shortfall of more than $100 billion a year, which may have worsened amid the COVID-19 pandemic.

Innovative finance mechanisms supported by the ASEAN Catalytic Green Finance Facility (ACGF) can play a key role in catalyzing much-needed funds from private capital to boost a green, sustainable economic recovery in the region, with infrastructure that is environmentally sustainable, low-carbon, climate-resilient, and meets the needs of local communities.

The ACGF is an ASEAN Infrastructure Fund initiative managed by ADB’s Southeast Asia Department Innovation Hub. It helps Southeast Asian governments prepare and finance infrastructure projects promoting environmental sustainability and contributing to climate change goals.
The ACGF provides ASEAN countries with access to more than $1.4 billion in loans, along with technical assistance that strengthens the regulatory environment and scales up green infrastructure investments.
The ACGF finances sovereign projects that meet its published green investment principles, combining climate and environmental indicators, financial bankability indicators, and a roadmap for attracting private capital investments.

Twelve Things to Know about the ACGF

The Association of Southeast Asian Nations (ASEAN) Catalytic Green Finance Facility (ACGF) was launched in April 2019 to promote green infrastructure investments in Southeast Asia. Currently in its three-year pilot phase, the ACGF is an initiative of the ASEAN Infrastructure Fund, a regional financing vehicle created by ASEAN member states and the Asian Development Bank (ADB) to support infrastructure development in Southeast Asia.

Sources: ASEAN Catalytic Green Finance Facility 2019-2020: Accelerating Green Finance in Southeast Asia
ASEAN Infrastructure Fund: Financing Infrastructure for Growth and Development
The ACGF is the only green finance facility focused on developing and increasing climate-positive projects that is owned by the governments of a regional bloc, in this case the 10 ASEAN member countries (Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet Nam) and ADB. ADB also manages the facility.

Source: ASEAN Catalytic Green Finance Facility 2019-2020: Accelerating Green Finance in Southeast Asia
The ACGF provides ASEAN member governments with technical assistance and access to more than $1.4 billion in loans from the ASEAN Infrastructure Fund and cofinancing partners: ADB, Agence Française de Développement, the ASEAN Infrastructure Fund, the European Investment Bank, the European Union, KfW, and the Republic of Korea.

Source: ASEAN Catalytic Green Finance Facility 2019-2020: Accelerating Green Finance in Southeast Asia
The ACGF’s technical assistance helps governments identify and prepare commercially viable green infrastructure projects, while its loans provide direct investments to eligible projects. The two-pronged approach helps reduce risks associated with financing green infrastructure projects, making them more attractive to private capital investors.

Source: ASEAN Catalytic Green Finance Facility 2019-2020: Accelerating Green Finance in Southeast Asiahttps://players.brightcove.net/791607097001/9fa20be7-aba0-42f9-92b4-438ab9db690a_default/index.html?videoId=6240813495001
The ACGF provides knowledge and training programs to increase green infrastructure investments by strengthening the regulatory and institutional capacity of ASEAN governments.

Sources: Green Finance Strategies for Post-COVID-19 Economic Recovery in Southeast Asia: Greening Recoveries for Planet and People
Green, Sustainability, and Social Bonds for COVID-19 Recovery: A Thematic Bonds Primer
ASEAN Catalytic Green Finance Facility 2019-2020: Accelerating Green Finance in Southeast Asia
Only projects owned or guaranteed by governments of developing member countries of ASEAN can be supported by the ACGF.

Sources: ASEAN Catalytic Green Finance Facility 2019-2020: Accelerating Green Finance in Southeast Asia
ASEAN Catalytic Green Finance Facility: Investment Principles and Eligibility Criteria
The ACGF supports projects promoting renewable energy, energy efficiency, sustainable urban transport, water supply and sanitation, waste management, and climate resilient agriculture. Eligible projects should have clear climate indicators and environmental targets, financial bankability indicators, and a roadmap for attracting private capital investment.

Source: ASEAN Catalytic Green Finance Facility: Investment Principles and Eligibility Criteria
The ACGF is currently administered by a team at ADB’s Southeast Asia Department’s Innovation Hub specializing in financial structuring and analysis, project origination, strategy and partnerships, knowledge, and communications.

Source: ASEAN Catalytic Green Finance Facility 2019-2020: Accelerating Green Finance in Southeast Asia
Since becoming fully operational in October 2019, the ACGF has exceeded its targets set for the pilot phase (2019–2021). The EDSA Greenways Project in the Philippines, approved by ADB in December 2020, met the requirements for ACGF support and included financing from the ASEAN Infrastructure Fund.

Source: Philippines: Epifanio de los Santos Avenue Greenways Project
In 2019, the ACGF helped prepare the 100-megawatt Cambodia National Solar Park Project’s development and bidding process, which resulted in the lowest tariff for grid-connected solar photovoltaic across Southeast Asia. The project is structured as a public–private partnership. Cambodia’s national electricity utility Electricite du Cambodge provided the land and transmission access, while the private sector will provide power generation capacity. The ACGF is now providing technical assistance to help develop similar projects across Southeast Asia.

Source: Cambodia: National Solar Park Project
ADB is working with partners such as the Green Climate Fund and the Government of the United Kingdom to explore the possibility of using concessional funds to support green infrastructure in Southeast Asia.

Sources: ASEAN Catalytic Green Finance Facility 2019-2020: Accelerating Green Finance in Southeast Asia
Green Climate Fund: Proposed Participation by the Asian Development Bank Through the Accreditation Master Agreement
The ACGF is committed to helping ASEAN countries recover from the COVID-19 pandemic, including developing projects that will significantly reduce greenhouse gas emissions, generate much needed climate-friendly jobs, and contribute to the Sustainable Development Goals (SDGs).
Sources: ASEAN Catalytic Green Finance Facility 2019-2020: Accelerating Green Finance in Southeast Asia
ADB and the Sustainable Development Goals