AfDB loan of $250 million to help the Philippines realize its climate ambitions – Philippines

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MANILA, PHILIPPINES (May 31, 2022) – The Asian Development Bank (AfDB) has approved a $250 million policy-based loan to support the Philippines in its climate change adaptation and mitigation efforts.

The Climate Change Program of Action will support the Philippines in making its nationally determined contribution – its commitment to advance global efforts to stabilize the global climate under the Paris Agreement – ​​and to intensify efforts to transform vulnerable sectors into a climate-resilient, low-carbon economy.

“We have a climate emergency, and all countries must come together and tackle the causes and adapt in ways that ensure food security, protect our biodiversity and improve the well-being of millions of vulnerable people,” said AfDB Vice President for East Asia, Southeast Asia and Pacific Ahmed M. Saeed. “The Philippines has adopted important climate actions and goals that will help address these threats and challenges and guide a green and resilient recovery from the COVID-19 pandemic.”

“This is the AfDB’s first loan based on climate action policies. It will help the Philippines develop, implement and finance a holistic approach to addressing climate change by shifting to low-carbon pathways, building the capacity of vulnerable sectors to adapt to climate change and increasing the conservation of land and marine resources,” he said. .

The 2021 Global Climate Risk Index ranks the Philippines as the fourth most affected country by extreme weather events in the world from 2000 to 2019. The pandemic has increased the country’s vulnerability to the economic impact of severe weather events. The poorest households are disproportionately affected, particularly in urban areas with less secure infrastructure and those along the country’s vast coastal areas most exposed to extreme weather conditions.

The new program targets policy reforms and will help the Philippine government establish planning, financing and institutional systems to scale up climate action. It will support reforms to build the resilience of farming and fishing communities to the growing impacts of climate change and reduce greenhouse gas emissions through the deployment of renewable energy, energy efficiency and sustainable transport. The program was prepared jointly with the French Development Agency, which provides co-financing of $172 million to the government.

The AfDB loan is part of its commitment to bold climate action. This includes its lofty ambition to provide $100 billion in cumulative climate finance to its developing country (LDC) member countries from 2019 to 2030; its collaboration with the Philippine government to pilot its energy transition mechanism aimed at accelerating the retirement of coal-fired power plants and replacing them with clean energy infrastructure; and its support for a green recovery through the ASEAN Catalytic Green Finance Mechanism. The AfDB has joined other Multilateral Development Banks in committing to a just transition that helps DMCs move towards net-zero economies.

Policy-based loans transfer loan amounts to a government’s general budget instead of paying for explicit project costs. Loan funds are disbursed only when the borrower completes the policy reforms or actions that have been agreed with the AfDB. This is the AfDB’s first policy-based loan whose main objective is climate change.

The AfDB is committed to achieving a prosperous, inclusive, resilient and sustainable Asia and the Pacific, while continuing its efforts to eradicate extreme poverty. Founded in 1966, it is owned by 68 members, including 49 from the region.

Media Contact

Marquez, Rosemarie F.

Senior Communications Officer, Philippines Country Office

+63 2 8683 1016

+63 998 5914659

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Davis, Robert

Senior Communications Specialist

+ 63 999 999 2592

Email contact form

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