Vientiane Capital, Lao PDR, March 6, 2024—As member countries of the Association of Southeast Asian Nations (ASEAN) pursue a low carbon growth path to mitigate climate change impacts, key representatives from public and private sectors gathered in Vientiane, the capital of Lao PDR, to discuss ways to unlock the finance needed for a resilient and inclusive transition across the region.
As part of the 27th ASEAN Senior Level Committee on Financial Integration Meeting, the Bank of Lao PDR, in collaboration with IFC, co-hosted a regional conference—Promoting Green Finance in ASEAN—to convene top decision makers from governments, financial institutions, and industries. The discussions focused on a range of topics, including regulators' vital role in creating a supportive and enabling environment for green finance flows, hindrances to scaling climate finance in the region, and opportunities and challenges for the private sector to attract finance for climate-smart initiatives.
ASEAN member states are among the world's most vulnerable to climate change, challenged by rising sea levels, extreme weather, and resource depletion in recent years. While the countries have set ambitious goals of achieving net zero in the next three decades, the scale of financing needed is huge. In the power sector alone—to meet rising energy needs in ways that align with the Paris Agreement—annual investments in clean energy in Southeast Asian emerging market and developing economies will need to increase by about seven times from $30 billion in 2022 to more than $200 billion per year by the early 2030s, according to a new report.
"Amidst the urgency of climate action, channeling finance into the green and environment-friendly projects that help drive our sustainable agenda requires a multi-pronged, multi-stakeholder response," said Bounleua Sinxayvoravong, Governor of the Bank of Lao PDR. "Through action-oriented discussions like today's conference, we can leverage the insights and experience of both the public and private sectors across the region to scale up sustainable financing flows into the region to realize the climate and development targets of one of the most dynamic economic blocs in the world."
The Bank of Lao PDR, with IFC's support, is developing a sustainable finance policy framework to establish standards and guidelines for green lending and issuance of thematic bonds while building capacity of regulators and market participants in the country.
"Governments alone cannot address the huge climate financing gap in emerging and developing markets in Asia-Pacific. As the conference highlighted today, private capital is key to bridging the gap. Collaborative stakeholder efforts from across the public and private sectors can further help create the right conditions to unlock green finance, channeling it to where it is needed most. This will help drive economies and create jobs while promoting a greener and more livable environment in the region," said Thomas Jacobs, IFC Country Manager for Viet Nam, Lao PDR, and Cambodia.
The conference was attended by almost 140 finance regulators and officials representing ASEAN member countries, pertinent ministries in Lao PDR, development partners, business associations, financial institutions, and other stakeholders.
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