ISLAMABAD: The Asian Infrastructure Investment Bank (AIIB) has launched its inaugural Climate Action Plan (CAP), a milestone in the bank’s ongoing commitment to combatting climate change.

Designed to guide AIIB’s climate ambition from 2024-30, the CAP brings together the principles governing the bank’s climate financing while identifying crucial action areas that will steer AIIB’s investments in support of its members.

The Beijing-based AIIB has set ambitious targets, committing to allocate at least 50 per cent of its annual financing approvals to climate by 2025. In 2022, the bank attained a 56pc rate.

By the second quarter of 2023, the bank had achieved a cumulative $11.75bn in climate finance and had financed 107 projects with climate components. In 2023, AIIB issued Asia’s first adaptation bond, demonstrating its commitment to climate resilience. AIIB now aligns all new investments with the principles of the Paris Agreement as of July 1, 2023.

The global climate financing reached only an average of $653bn in 2019-2020, evenly split between public and private sources. Under-investment in climate mitigation and adaptation measures — while high emission options continue to be financed — lessens the chances of meeting the objectives of the Paris Agreement.

Lack of adequate financing also leaves many developing countries without the resources to transition to a low-carbon economy and adapt to the impacts of climate change, the AIIB document says.

AIIB says the impacts of climate change are already widespread and rapidly intensifying, while the window of opportunity to prevent the worst impacts of global warming is fast closing.

Published in Dawn, September 27th, 2023