The Asian Infrastructure Investment Bank (AIIB) is actively developing the climate bond market.
As Day.Az reports with reference to Trend, the President of the AIIB and the Chairman of the Board of Directors said this Jin Liqun during a roundtable on “Transformative climate action: Shifting the focus from revenue to impact and the catalytic impact of MDBs” at COP29.
“We are actively developing the climate bond market in Asia. Our first climate bond issue raised AUD 500 million (about US$323.245 million) in sustainable infrastructure financing. We are also creating climate funds and venture capital to accelerate the climate transition and promote the development of climate technologies,” he said.
“Since its inception, our bank has benefited greatly from the experience of peer MDBs and a wide range of public and private sector partners. We are currently actively developing new tools and approaches to create and strengthen partnerships,” Liqun said.
It should be noted that on November 11, the 29th session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP29) started in Baku.
The United Nations Framework Convention on Climate Change is an agreement signed at the Earth Summit in Rio de Janeiro in June 1992 to prevent dangerous human interference with the climate system. The abbreviation COP (Conference of Parties) translated from English means “Conference of Parties”, this is the highest legislative body that controls the implementation of the Framework Convention on Climate Change.
There are 198 countries that are parties to the Convention. Unless the parties agree otherwise, the COP is held annually. The first COP event took place in March 1995 in Berlin, and its secretariat is located in Bonn.
– What is the role of the Asian Infrastructure Investment Bank in promoting climate finance?
Time.news Interview
Editor: Laura Bennett
Expert: Jin Liqun, President of the Asian Infrastructure Investment Bank (AIIB)
Laura Bennett: Thank you for joining us today, Mr. Jin. Your recent comments at the roundtable on “Transformative Climate Action” have sparked considerable interest. Can you tell us what the AIIB is doing to advance the climate bond market?
Jin Liqun: Thank you, Laura. It’s a pleasure to be here. At the AIIB, we understand the critical role that finance plays in addressing climate change. We’re actively working to develop the climate bond market as a vital source of funding for sustainable infrastructure projects. This includes promoting green bonds and developing frameworks that ensure these investments contribute positively to the environment.
Laura Bennett: That sounds promising. How does the AIIB plan to ensure that these climate bonds genuinely support transformative climate actions?
Jin Liqun: Great question. We are committed to rigorous standards and transparency in our funding. The AIIB collaborates with international partners to establish guidelines that define what qualifies as a ”green” investment. By doing this, we can ensure that the projects we fund are aligned with global climate goals, like those outlined in the Paris Agreement.
Laura Bennett: To what extent do you believe the private sector will be involved in this initiative?
Jin Liqun: The involvement of the private sector is crucial. We believe that significant capital will be required to tackle the climate crisis, and we can’t rely solely on public financing. Therefore, we are working to create an environment that attracts private investment into the climate bond market. This involves providing investors with appropriate incentives and reducing perceived risks associated with these investments.
Laura Bennett: What specific initiatives have you seen that could serve as models for climate bond projects?
Jin Liqun: We have several successful examples already. For instance, some countries have issued green bonds to fund renewable energy projects, energy efficiency improvements, and sustainable public transportation systems. These initiatives not only mitigate climate impact but also stimulate economic growth and create jobs. We’re looking to replicate such successes across our member countries.
Laura Bennett: In your opinion, what are the biggest challenges facing the climate bond market today?
Jin Liqun: One of the primary challenges is the lack of standardization. Different regions have varying definitions of what constitutes a ‘green’ project, leading to confusion in the market. Additionally, there’s often a knowledge gap among potential issuers regarding how to enter the bond market and the associated benefits. We are focusing on education and capacity-building to overcome these barriers.
Laura Bennett: That’s insightful. How does AIIB plan to engage member countries to foster these climate finance initiatives?
Jin Liqun: Engagement is key. We are conducting workshops, providing technical assistance, and sharing best practices among our members. We believe that by working closely with them, we can develop tailored strategies that fit each country’s unique circumstances and challenges. It’s about building partnerships that enhance both climate action and sustainable development.
Laura Bennett: Lastly, what message would you like to convey to investors who are considering entering the climate bond market?
Jin Liqun: I would urge investors to recognize the immense opportunities in the climate bond market. This is not just about ethical investing; it’s a chance to be part of a transformative movement that is vital for our planet’s future. Investing in climate-friendly projects can yield significant long-term benefits—both financially and environmentally. By joining us in this mission, investors can play a pivotal role in shaping a sustainable future.
Laura Bennett: Thank you, Mr. Jin, for your insights and for sharing the AIIB’s vision for the future of climate finance. It was a pleasure speaking with you.
Jin Liqun: Thank you, Laura. It’s been a pleasure discussing these important initiatives with you.
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End of Interview