The Asian Infrastructure Development Bank (AIIB) has commended the proposal of Finance Secretary Carlos Dominguez III for multilateral development banks (MDBs) to work together in incentivizing private capital flows to the climate projects of developing countries, as it committed to vigorously support its members, including the Philippines, in achieving their respective low-carbon energy transition commitments.

AIIB President Jin Liqun said the Bank recognizes that “a lot more needs to be done” to mobilize private sector investments in climate adaptation and mitigation projects, which is why it is “committed to further scaling up and pivoting private investments for climate through public-private partnerships and the use of innovative financial instruments including blended finance.”

He expressed his “sincere appreciation” to Secretary Dominguez for the latter’s “active leadership in bringing together a collective proposal amongst Multilateral Development Banks (MDBs) to incentivize capital flows to achieve climate change goals in developing countries.”

“I commend your endeavors in improving our global approach towards tailored climate finance investments in order to make a significant impact on local communities and to pursue climate change objectives. AIIB is committed to positioning itself as Asia’s Climate Finance Partner, to support its members in achieving their respective low-carbon energy transition and climate pledges made in both domestic and international fora including the Paris Agreement,” President Jin said in his letter to Secretary Dominguez.

The letter, dated Nov. 30, was in response to Secretary Dominguez’s proposal for the World Bank Group (WBG), Asian Development Bank (ADB) and the AIIB to catalyze the flow of private sector capital that developing countries need to meet their objectives on fighting planet warming, which could be done by adopting a harmonized set of guidelines for vetting climate adaptation and mitigation projects.

MDBs can also set the standards for transparency and accountability in monitoring the climate change initiatives of developing countries to further assure private investors on the prudent use of the funds they have invested in these projects, said Secretary Dominguez, who serves as governor for the Philippines in the boards the AIIB, WBG and ADB.

In his letter, President Jin said he “look[s] forward to benefitting further from your (Secretary Dominguez’s) guidance as we continue to build on the strong relationship between AIIB and the Philippines as one of our key shareholders.”

President Jin outlined some of the AIIB’s key initiatives in helping its members fight climate change, among them, the Bank’s commitment to ensure that at least 50 percent of its overall approved financing by 2025 will be directed toward climate finance, and its operations aligned with the goals of the Paris Agreement by July 1, 2023; and its pioneered approaches to demonstrate proof-of-concept of climate investments in bonds, private equity and other segments of the financial markets in Asia.

The AIIB haa also been actively participating in the joint MDB climate working groups to address several issues, including developing the common definition on climate mitigation and adaptation finance and its annual reporting, among other concerns, President Jin said.

He estimates that AIIB’s cumulative climate finance approvals would be US$50 billion by 2030.

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