ISLAMABAD: The Asian Development Bank (ADB) will approve a $1.5 billion countercyclical loan for Pakistan next month as it announced plans to provide $14bn to the Asia and the Pacific nations to ease a worsening food crisis posed by the impacts of climate change.

Speaking at a virtual news conference at the beginning of its 55th annual meeting from Manila, ADB President Masatsugu Asakawa said the $1.5bn countercyclical loan for Pakistan was under process and would be approved in October. “The ADB would continue its support in mitigating the climate change-related crisis in Pakistan,” he said while answering a question.

“The ADB will provide $14bn in support from 2022 to 2025 to address food security,” he said, adding this response to the Asia and the Pacific region will be comprehensive, bringing into focus both the immediate and long-term aspects of food security.

Responding to a question, Mr Asakawa expressed grief over the unprecedented devastation caused by the recent flooding in Pakistan and said the ADB had immediately approved a $3 million grant for emergency relief efforts and to provide food, medical and other relief goods to the affected people. He said the bank was aware of the sufferings of people and was committed to helping Pakistan overcome the devastating impact of this natural disaster and provide immediate relief to affected families.

Funding will help Pakistan mitigate food security challenges

He said he had assured the Pakistani leadership and the people that the ADB stood with the government to build resilient infrastructure for climate change and there were a couple of other channels with which the bank would work to not only support food security and reconstruction efforts over the long run besides more general financial support to deal with challenges caused by Russia-Ukraine war, commodity prices and international financial crisis.

The ADB president said we should take this crisis as an opportunity and find all avenues including the European Green Energy Fund and seek those opportunities for climate and food security.

The president said for developing Asia will require $1.7 trillion per year to support infrastructure needs including climate resilient infrastructure. He said ADB was providing unprecedented support of $100bn to deliver climate financing to its developing member countries from 2019 to 2030.

“To reach this $100bn ambition we are exploring the opportunities for investments in climate change mitigation, scaling up adaptation projects that focus on resilience and increasing climate financing”, he said adding that at least $34bn out of $100bn are targeted to go for climate adaptation financing by 2030.

He said the assistance expands ADB’s already significant support for food security in the region, where nearly 1.1bn people lack healthy diets due to poverty and food prices which have soared to record highs this year. The funding will be channeled through existing and new projects in sectors including farm inputs, food production and distribution, social protection, irrigation, and water resources management, as well as projects leveraging nature-based solutions.

In addition, the ADB will continue to invest in other activities which contribute to food security such as energy transition, transport, access to rural finance, environmental management, health, and education, the president said.

“This is a timely and urgently needed response to a crisis that is leaving too many poor families in Asia hungry and deeper poverty,” he said. “We need to act before the impacts of climate change worsen and further erode the region’s hard-won development gains”, he said, adding the support will be targeted, integrated, and impactful to help vulnerable people, particularly vulnerable women, in the near term, while bolstering food systems to reduce the impact of emerging and future food security risks.”

Mr Asakawa said the Russian invasion of Ukraine had disrupted supplies of food staples and fertiliser, straining a global food system already weakened by climate change impacts, pandemic-related supply shocks, and unsustainable farming practices.

Asia and the Pacific is vulnerable to food shocks, as some of its countries depend on imported staples and fertilizer. Even before the invasion of Ukraine, nutritious food was unaffordable for significant portions of the population in many ADB low-income member countries.

He feared that the current food security crisis could get even worse if nations fail to address climate change. “Floods, droughts, heat, disease, and other factors affected by climate change will have an impact on food production. Disruptions to livelihoods will drive even more food scarcity, compounded by climate-induced migration”, he emphasised.

He said the ADB had withdrawn from financing new coal-fired power plants and introduced Energy Transition Mechanism (ETM) to accelerate the retirement of existing coal power plants, and promote a shift to clean energy while ensuring a just transition.

Published in Dawn, September 28th, 2022