ADB’s Private Sector Operations Double Climate Financing as Transactions Hit New High

The Asian Development Bank (ADB) doubled to US$1 billion the amount of climate financing from its private sector operations in 2023, with 75% of its projects including climate-related funding, according to the Development Effectiveness Report of Private Sector Operations 2023.

Overall, ADB committed a record 40 private sector transactions worth US$1.7 billion through its own capital resources, 54% higher than the previous year.

Long-term co-financing with the private sector reached US$3.4 billion, reflecting ADB’s focus on mobilizing private capital to address development priorities such as climate change. ADB realized US$2.7 in long-term co-financing for every US$1 of its own private sector commitments, significantly more than the previous year’s US$1.8 co-financing ratio.

“Our results show that ADB is a trusted development partner of the private sector, which will play a crucial role in providing the resources this region needs to address its key development challenges,” said ADB Vice-President for Market Solutions Bhargav Dasgupta. “In 2023, ADB led the financing of major development projects, making them attractive to investors and helping developing member countries to achieve their climate and other development goals.”

With the Japan International Cooperation Agency, ADB launched the Leading Asia’s Private Infrastructure Fund 2 (LEAP 2), with capital up to US$1.5 billion. This fund follows the success of the initial LEAP fund initiated in 2016, and provides co-financing for high-quality, climate-resilient, and sustainable infrastructure projects.

ADB committed 25 private sector projects in frontier economies and new and challenging sectors in 2023—making up 63% of all projects for the year—as part of an ongoing effort to diversify its private sector operations. Its Trade and Supply Chain Finance Program facilitated over US$4.7 billion through over 21,000 trade and supply transactions.

Projects committed in 2023 are expected to benefit 170,800 micro, small, and medium-sized enterprises (MSMEs), nearly 98,000 of them led by women. Agribusiness projects will support the livelihoods of nearly 77,000 farmers.

ADB’s active private sector portfolio has created over half a million jobs; benefited 36.9 million MSMEs, and reduced greenhouse gas emissions by 22.2 million tons of carbon dioxide equivalent.