ADB to mobilise up to $2.75b of pvt capital through global insurer partnership

The Asian Development Bank (ADB) has signed an agreement with ten leading global insurers to mobilise up to $2.75 billion of private capital to support ADB's lending for sustainable growth in Asia and the Pacific.

The Master Framework Agreement for Sustainable Infrastructure facilitates the growth of the private sector in the region and will allow ADB to increase its lending capacity to projects through the use of credit insurance. 

The partnership was signed with the following highly rated insurers: Tokio Marine Group, Chubb, AXA XL, Liberty Specialty Markets, Coface, Swiss Re, Everest, AXIS Capital, The Hartford, and Allianz Trade. 

These insurers will help derisk a portion of ADB's loans to sustainable infrastructure projects allowing ADB to transfer credit risk from its portfolio to insurers' balance sheets, freeing up ADB's capital, managing its exposures and increasing its lending capacity, read an ADB press release. 

"This partnership demonstrates how innovative risk-sharing can attract billions in private capital for sustainable development. By transferring credit risk to global insurers, ADB boosts its lending capacity and creates a replicable model for reducing infrastructure investment risks in emerging markets," said ADB Vice-President Bhargav Dasgupta. 

"This partnership highlights how insurance can mobilise private capital for climate-resilient and inclusive growth," Bhargav added.  

"While climate change priorities are shifting, Tokio Marine Group remains committed to supporting energy transition endeavours, in line with the Japanese government's Green Transformation (GX) strategy. We are delighted to be able to contribute to ADB's private capital mobilisation efforts in the sustainable finance space, by offering a significant participation in ADB's new Master Framework," said Tokio Marine HCC - Credit Group President Jerome Swinscoe.

The program streamlines the underwriting and approval process for credit risk transfers, enabling ADB to mobilise cofinancing capacity more efficiently. 

ADB's loans for infrastructure have supported private sector financing of solar and wind energy, sustainable transport and green data centres. The program will allow ADB to further expand its support and provide the flexibility to offer innovative solutions to develop private sector investment capacity in the region. 

ADB is a leading multilateral development bank supporting inclusive, resilient and sustainable growth across Asia and the Pacific. 

Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members, 50 from the region.