Illustrative image (Source: thetokenist.io) Hanoi (VNA) – The Hongkong and Shanghai Banking Corporation (HSBC) onApril 5 made several recommendations to help Southeast Asian nations attractprivate financing towards economically and environmentally sustainableprojects.
The proposals weremade at the 23rd ASEAN Finance Ministers’ Meeting in Chieng Rai,Thailand, in response to the region being disproportionately affected byclimate change and the growing need for private investment to help bridgeinfrastructure funding gaps.
In the context that theAsian Development Bank (ADB) forecasts that, if left unaddressed, climatechange could reduce the region’s gross domestic product (GDP) by 11 percent by theend of the century and its public sector can cover less than 50 percent of thetotal investment required.
To fill this gap, the HSBCsuggested ASEAN member states, including Vietnam, take steps to promote greaterprivate sector participation in infrastructure financing.
The bank proposedlaunching an annual “Doing sustainable infrastructure” report, as so far there is no single, standardised, validatedand dedicated report that governments, international organisations, developmentbanks and the private sector could rely on to evaluate progress and identifyopportunities for further improvements in ASEAN.
Partnering withmultilateral organisations, the report aims to provide a checklist of bestpractices that countries and cities can consider to better enable financing ofsustainability linked infrastructure.
It is also necessaryto create an ASEAN urban infrastructure network built on ASEAN's Smart CitiesNetwork. The network will aim to provide capacity building for municipal,procurement and other public sector leaders so that they are better equipped towork with the private sector to develop bankable and sustainable infrastructureprojects.
The HSBC alsosuggested developing an ASEAN blended finance toolbox, which would partnerdevelopment banks and the private sector and could look into standardisinginstruments that address common risks associated with sustainability linkedinfrastructure projects.
HSBC’s head of business corridors for Asia-Pacific Mukhtar Hussain said that thedevelopment of sustainability linked infrastructure using public and privatesector financing is the only way that ASEAN can address the challenges thatclimate change presents to its economies.
Mukthar pointed outclimate change affects individuals, countries, corporates and investors sofinding and delivering constructive solutions should be a joint effortincluding global banks like the HSBC.
An estimated 100trillion USD of investment is needed in new sustainable infrastructure globallyover the next 15 years – including financing for clean energy infrastructure,sustainable transport, energy efficiency and waste management – to meet thegoal of the Paris Climate Agreement to limit global temperature increases to“well below” two degrees celsius over pre-industrial times.-VNA
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