The Green Billions

Inclusive Climate Development Goals

South Asia as a region has one of the highest growing economic rates in the world, making it one of the key regions for climate investments with the introduction of appropriate reforms. While the Governments in the region are moving towards implementing policies that will shift market incentives, open doors for climate business, and invest in climate-resilient initiatives that are consistent with low-carbon growth objectives, foreign support is being poured in to meet these infrastructural investments. In early 2022, the European Union (EU) mobilized funding of USD$ 21.5 million (EUR 18 million) which will help six nations in the region, including India, construct climate-smart, inclusive infrastructure. The program which is now called Accelerating Climate-Smart and Inclusive Infrastructure in South Asia (ACSIIS) will be implemented under IFC, The International Finance Corporation (IFC), the world’s largest development bank, focusing on the private sector in emerging nations. The program will leverage the climate-smart and green development efforts of countries in South Asia, including India to deliver greater efficiency, stability and resiliency for their populations. The programme will also help to establish climate-smart investments in agriculture, industry, tourism, health, and education, with an emphasis on cities, gender, and green finance. The latest project builds on IFC’s prior collaboration with the EU to assist India’s Eco-Cities Program and other regional programmes. This program aims to leverage IFC’s years of experience in supporting climate-smart infrastructure development in the region. The IFC has already eyed large-scale development potential in a few key areas in the region. Through the Partnership for Cleaner Textile in Bangladesh, IFC is currently assisting the textile industry in improving resource efficiency. By placing solar panels on store roofs, IFC aims to assist Sri Lanka’s leading retail chain in developing sustainable local supply chains and reducing its carbon impact. The United Nations (1) has projected Bhutan’s hydropower potential to be 30,000 MW as it is primarily the backbone of the country’s economy. IFC is focusing on Bhutanese hydropower and electric transport by developing the country’s economically viable hydropower potential to meet national energy demands and generate export revenue represents a $40 billion investment opportunity. The Bhutanese government has also set a lofty electric vehicle objective and emphasized the importance of a low-carbon transportation system, potentially unlocking $940 million in funding for the sector. In Nepal, the organization is working alongside agribusinesses to boost effective resource utilization, efficiency, and climate resilience in the agricultural sector. IFC is also funding initiatives in the region that provide access to clean, cheap energy. South Asia has three of the top five nations in the world in terms of climate change vulnerability, necessitating urgent climate investment to improve resilience and create low-carbon growth prospects. Further, a report by UNCTAD (2)shows that Infrastructure investment agreements with private participation fell by an extraordinary 52 percent in 2020 compared to 2019. COVID-19 has resulted in a drop in investment into SDG-relevant sectors in developing countries. With the exception of one, every SDG investment sector saw a double-digit drop from pre-pandemic levels. The shock compounded reductions in areas including power, food and agriculture, and health that were already struggling before the COVID-19 crisis. As for the financial impact, IFC estimates that South Asian countries can unlock more than US$3 trillion of climate-smart investment opportunities by fully meeting the national targets under the Paris Agreement by 2030. This means that IFC will encourage PPPs for infrastructure in the key growth sectors, including energy and mining; electricity generation, transmission and distribution; roads; water supply, sanitation and irrigation; private sector financing of public sector infrastructure and, where appropriate, natural resource management and biodiversity conservation. Although the project is yet to be panned out in detail, for India particularly, this investment could bring its $5 trillion economy dream an inch closer. The latest project aims to build on IFC’s prior collaboration with the EU to assist India’s Eco-Cities Program and other regional programmes. Eco-Cities India is a multi-year technical advisory programme formed as part of the EU-India Clean Energy and Energy Efficiency Cooperation. The programme focuses on climate change and is organized around five cities: Bengaluru, Bhubaneswar, Chennai, Mumbai, and Pune metropolitan regions. The programme aims to help government and civil society achieve efficiency goals, such as the Paris Climate Agreement’s Nationally Determined Contributions—emissions reductions and a greater focus on climate-resilient development—by assisting them in fulfilling efficiency targets. Now with more funds, the program can bring about changes in demographics and competitiveness in battling climate change, environmental sustainability, and disaster risk reduction alongwith methods for regional innovation and smart specialization. The partnership in general means the mobilization of investment in South Asian infrastructure with a focus on sustainability, making it one of the most important recent collaborations towards tackling climate change in the world.