ADB boosts climate finance by $7.2 billion with U.S. and Japan guarantees

The Asian Development Bank (ADB) will boost its climate finance by up to $7.2 billion, following the U.S. and Japan's agreement to provide sovereign guarantees for existing loans. This marks the first time such guarantees have been used for climate finance. The U.S. will guarantee up to $1 billion, while Japan will underwrite $600 million. This arrangement allows the ADB to increase lending for climate projects without needing new country donations. The guarantees will last for 25 years. One of the initial projects funded will be in Pakistan, aimed at producing sustainable aviation fuel from cooking oil. The ADB has been collaborating with other development banks to expand climate-related lending and hopes to inspire similar initiatives globally.