South Asia’s ambitious plans to meet its climate targets under the Paris Agreement represent US$3.4 trillion worth of investment opportunities in cities and infrastructure by 2030, a new report released yesterday by International Finance Corporation (IFC) notes.
Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka, which represent 7.38 percent of global carbon dioxide emissions, have enormous but untapped opportunities in climate-smart investing in sectors including renewable energy, transport, green buildings, urban water, climate-smart agriculture, and municipal solid waste.
The report identifies US$18 billion of climate investment opportunities in Sri Lanka alone, along with US$3.1 trillion in India, US$172 billion in Bangladesh, US$42 billion in Bhutan, US $2 billion in the Maldives, and US $46 billion in Nepal.
“The only way that the South Asian countries can take advantage of these climate investment opportunities is with a strong and engaged private sector,” said IFC CEO Philippe Le Houérou.
“We also need to have a comprehensive approach to creating markets for climate business in key sectors. That means putting in place necessary policy frameworks, promoting competition, and building capacity and skills to open new markets.”
The impacts of climate change on business assets, supply chains, and business interruptions are already a major concern for South Asian companies. This concern coupled with the urgency of addressing the air pollution reinforce the need for immediate action while capitalize on the existing investment potential.
The South Asia region has seen a surge in investment in clean energy and energy efficiency in recent years, contributing to significant development gains.
IFC’s report highlighted two sectors for future growth: due to rapid urbanization, green buildings represent an investment potential totaling more than US$1.5 trillion across South Asia between 2018 and 2030; and green transport infrastructure and electric vehicles create an opportunity of over US $950 billion to 2030.
Such investments generate further benefits by providing access to markets, enabling trade, and ensuring mobility, which in turn stimulate economic growth and private investment.