Six South Asian nations, including India, are set to benefit from a new $21.5 million funding from the European Union (EU), which will help to accelerate climate-smart and inclusive infrastructure investments in the region.
International Finance Corporation (IFC), the largest global development institution, focused on the private sector in emerging markets, will implement the project under the programme titled "Accelerating Climate-Smart and Inclusive Infrastructure in South Asia (ACSIIS)".
ACSIIS is a five-year programme (2021-2026) to help spur investments in energy, water, waste management, transport, logistics, and green buildings to benefit people and businesses in Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka.
ACSIIS would leverage $850 million of private sector investments in the region, read a press release.
The impact of Covid-19 on investments in infrastructure has been widespread and severe. Investment commitments in infrastructure with private participation in 2020 dropped by an unprecedented 52% from 2019 levels.
IFC estimates that South Asian countries can unlock more than $3 trillion of climate-smart investment opportunities by fully meeting the national targets under the Paris Agreement by 2030.
"Attracting private capital for climate-smart infrastructure sustainably and inclusively will be critical for post-Covid recovery in South Asia," said Hector Gomez Ang, regional director for South Asia at IFC.
"The EU's support for the programme could not come at a better time as it is vital to act now to unblock obstacles to spurring sustainable infrastructure projects. This programme will leverage IFC's experience and expertise in supporting climate-smart infrastructure development in the region," he added.
The programme will also support the development of climate-smart investments in agriculture, manufacturing, tourism, health, and education while focusing on key themes such as cities, gender, and green finance.
The latest initiative builds on IFC's previous partnership with the EU to support the Eco-Cities Programme in India and other programmes in the region.
"The ACSIIS project will support a green and inclusive recovery in South Asia. We are happy to see the existing EU cooperation in India broadening into a regional intervention with multi-sector coverage, in line with the objectives of the EU Green Deal, to promote sustainable development, the fight against climate change and the transition to renewable energy," said Ugo Astuto, ambassador of the European Union to India and Bhutan.
"This initiative will make a positive contribution to sustainable connectivity, supporting the EU engagement in key sectors to build a greener future," he added.
Through ACSIIS, IFC will support early-stage market development to address key market-wide constraints, as well as deliver project-level technical advice to structure sustainable infrastructure investments for the target countries.
The programme will also support capacity building of private and government sectors to improve their ability to design, structure, and implement sustainable infrastructure projects. Several of these components are part of IFC's Upstream strategy, which aims to create markets in the most challenging environments, laying the foundation for future investment projects.