ADB Ventures [NDF C123]

Regional Asia
ADB Ventures
Ref. NDF C123

Partner Agency: Asian Development Bank
Implementing Agency: Asian Development Bank
NDF financing: EUR 10 million
Project Period: 2020 – 2037

Objective

There is a mismatch between the supply and demand of innovative and promising climate technologies in key developing markets. Technology companies tend to focus on more developed markets, while the future growth of energy consumption and greenhouse gas emissions will be heavily concentrated in developing countries. Also, the adaptation finance gap is significant in developing countries. South and South East Asia, in particular, face this challenge due to small and fragmented markets, nascent innovation ecosystems, and lack of venture capital. As a result, entering these markets and scaling up solutions in the region entail high costs and risks and many companies with promising climate solutions will choose other markets instead.

ADB Ventures (ADBV) is a new facility, managed by the Asian Development Bank, addressing this mismatch by de-risking and accelerating market entry and diffusion of new climate technologies in South and South East Asia with a three-pronged concept. 

Firstly, ADBV Impact Labs identify and aggregate demand for climate solutions in the region, identify potential solutions for this demand, and facilitate a demand-driven process to select the most suitable innovations with impact at scale. Secondly, ADBV SEED provides reimbursable grant co-financing for pilot projects resulting from the Impact Labs. Thirdly, ADBV Investment Fund I will invest patient venture capital in selected companies, mostly sourced through the Impact Labs and SEED pilots.

With anchor funding from NDF, ADBV will be structured as a Financing Partnership Facility under the ADB Private Sector Operations Department, which will allow the facility to house several multi-investor trust funds in the future. The initial phase of the ADBV will consist of two multi-donor trust funds: (1) ADBV Technical Assistance Program for grant funding through ADBV Impact Labs and ADBV SEED, and (2) ADBV Investment Fund I for contributions to be invested as venture capital.

ADB Ventures will be a climate- and gender-focused facility promoting solutions in sustainable infrastructure and inclusive markets. A minimum of 80% of the funds will be invested in climate solutions including mitigation, adaptation and resilience. A minimum of 75% will be invested in solutions with gender impact, including, for example, access to basic services such as clean energy and clean water, as well as solutions supporting economic inclusion of women. The fund operations will follow the IFC Operating Principles on Impact Management.

Expected Outcomes

Climate-related outcomes

• Greenhouse gas emissions reduced

• Energy and water savings

• Adaptation and resilience benefits

• Improved productivity in infrastructure, industrial and service sectors

• Additional climate finance mobilised

Gender- and inclusion-related outcomes

• Enhanced access to basic goods and services

• Job creation

• Supporting women in ownership, leadership and employee roles

• Increased access to finance for entrepreneurs and SMEs

Financing

The total project cost estimate is EUR 54.5 million (USD 60 million). NDF will provide up to EUR 9 million as capital contribution for the Investment Fund I, and up to EUR 1 million as a grant for the Technical Assistance Program, while ADB will provide a minimum of EUR 4.5 million (USD 5 million) as a grant for the Technical Assistance Program only. The rest of the funding will be provided by additional development and climate finance institutions and/or donors.

NDF Contact

Program Manager Siv Ahlberg (siv.ahlberg@ndf.int)

Related links

ADB Ventures: design, piloting and implementation phase [NDF C120]