Countries in Asia are developing rapidly and moving to implement their Nationally Determined Contributions (NDCs) under the Paris Agreement. Investment in low carbon infrastructure and large-scale renewable energy deployment is central to realizing these commitments and moving towards the clean, sustainable and high-growth economies of the future. Attracting climate finance and investment—particularly from the private sector is essential to meeting these objectives.
Strong partnership and linkage between the public and private sector on enabling environments for finance mobilization, combined with targeted capital market interventions to address existing gaps in the climate finance landscape, are urgently needed to accelerate progress. To answer this call, the LEDS GP and Asia LEDS Partnership, with support from the Finance Working Group, are launching an Asia NDC Finance Community of Practice (Asian NDCF CoP).
The NDC Finance CoP will be an applied and interactive network for national and subnational governments, with engagement from business and private sector actors, technical institutions, non-profits and other international organizations.
What will the Asia NDC Finance Community of Practice Achieve?
The NDC Finance CoP will address real-time finance, policy and technical challenges to rapidly accelerate investment flow into clean energy NDC implementation efforts across the region. It will do this by bringing together key government and private sector decision-makers to:
1. Rapidly identify key barriers to investment mobilization in clean energy at the political, regulatory and financial levels on a country-by-country basis
2. Develop quick response political, regulatory and capital markets interventions, centred on green bonds and blended finance, to address those barriers
3. Coordinate with partner country governments, donors, philanthropy and the private sector to implement the identified interventions and solutions in a targeted and cost-efficient manner
Based on feedback from Asia LEDS Partnership members, the NDC Finance CoP will focus on learning and technical collaboration on two key topics, blended finance and green bonds.
Blended Finance: Blended finance uses public and philanthropic sources of capital to accelerate private capital flows into key sectors and instruments. The NDC Finance CoP will focus on design and development of blended capital structures and approaches to scale-up private investment into renewable energy and low carbon infrastructure across Asia.
Green Bonds: A green bond is a debt instrument that is issued to raise capital specifically to support climate-related or environmental projects, including for mitigation and adaptation and resilience. Issuers of bonds can be private companies, supranational institutions (such as multilateral banks), and public entities (municipal, state, or federal). Bond markets are key to unlocking local and international sources of lower-cost debt to scale investment in low carbon infrastructure. NDC Finance CoP work in this area will focus on targeted capacity building and technical assistance among and between entities–particularly national and subnational governments–interested in developing green bond product offerings.