USAID Green Invest Asia
The US Government's flagship climate financing program for sustainable landscapes across Asia
Connecting investors with sustainable agriculture and forestry
Partner > Co-invest > Transform
80% of the world’s deforestation is due to agricultural practices. In Southeast Asia, the increase in greenhouse gas emissions from agriculture was twice the global average from 1990-2016. At the same time, rising populations and changing demographics will be dramatically increasing the demand for food in the coming decades. This makes decoupling deforestation and agriculture through sustainable land use imperative to feed the planet and mitigate climate change.
While forests and agriculture hold more than 30% of the solution to the climate crisis, these solutions only receive 3% of climate finance. A more than 10-fold increase in private finance is needed to raise the $220 billion shortfall to fund sustainable agriculture/forestry in Southeast Asia until 2030.
USAID Green Invest Asia's mission is to mobilise finance to reduce emissions. This is achieved by partnering with businesses which have adopted or are transitioning towards sustainable low emission practices and support them access finance which enables them to scale their business. USAID Green Invest Asia also works closely with the investment and finance community in supporting the transition of sustainable climate financing from a niche, to a mainstream activity.
Mekong Strategic Capital (MSC), together with Pact, was awarded the 5 year contract by USAID to implement Green Invest Asia across the target countries of Indonesia, The Philippines, Vietnam, Thailand, Cambodia and Malaysia. MSC is specifically responsible for engaging with businesses and financial institutions to identify pipeline and assist in arranging and structuring transactions for the climate focused investments, which catalyze and enable sustainable agriculture and forestry projects across South East Asia.
USAID Green Invest Asia promotes sustainable land use and investment in sustainable agriculture and forestry in Southeast Asia by:
Supporting agriculture and forestry businesses in Southeast Asia to improve their sustainable commodity production and manage environmental risks; and
Matching companies with financial institutions and investors looking for environmentally and socially friendly, profitable land use businesses.
By 2022, USAID Green Invest Asia aims to mobilize $400 million of financing into sustainable commodity production. The impact of this investment will lead to a reduction of 25 million tons of CO2 equivalent greenhouse gas emissions, improving business efficiency and agricultural productivity, while lessening the effects of climate change.
Cambodian Institution for Green Financing
Supporting the acceleration of Cambodia towards a greener economy and society, boosting its resilience to the impacts of climate change
Mekong Strategic Capital was invited by several international conservation organisations to partner and develop a sustainable financing mechanism to support overall conservation objectives, as well as the development of a greener and more climate resilient economy in Cambodia. Leveraging from its extensive experience in the finance sector and investment landscape across Cambodia and the region, MSC developed the Cambodian Institute for Green Financing. Currently MSC is in advanced discussions and planning with the Cambodian Government and the Green Climate Fund to launch this initiative.
The Green Climate Fund (GCF) is a global fund created to support the efforts of developing countries to respond to the challenge of climate change. It was set up by the 194 countries who are parties to the United Nations Framework Convention on Climate Change (UNFCCC) in 2010, as part of the Convention’s financial mechanism.
MSC has been approved and received official delivery partner status for Green Climate Fund (GCF). As a delivery partner for GCF, we have been approved for readiness funding to design and prepare to launch a catalytic green lending facility / vehicle for Cambodia, which will provide suitably structured, local finance solutions required to catalyze and scale up investment into climate friendly businesses.
Cambodia currently lacks a private sector focused financial institution which has the capability to source and attract domestic and international climate finance into Cambodia, and then to on lend into local businesses and projects, whose activities will have strong climate outcomes.
With support from the National Government of Cambodia, international development & climate focused lenders, and local leading financial institutions, Mekong Strategic Capital aims to support the acceleration of Cambodia towards a greener economy and society, boosting its resilience to the impacts of climate change. It is anticipated this effort could prove a replicable model for scaling up locally driven climate finance solutions across Asia.
In 2015, Mekong Strategic Capital (MSC) was appointed to lead the Mekong Sustainable Finance Sector Working Group. This initiative, funded and supported by Wildlife Conservation Society (WCS), USAID, Pact, and Citibank, worked with local banks across the Mekong Region to support and train them on how to identify and manage social and environmental risk within their lending portfolios, as well as build internal capacity to finance green / climate friendly projects.
One of the direct outcomes of MSC’s work was supporting the establishment of The Cambodian Sustainable Finance Initiative (CSFI). CSFI is an initiative led by the Association of Banks in Cambodia (ABC), with the support of MSC and partners, to develop and strengthen finance sector safeguards and risk management standards related to social and environmental impacts which are potentially created through the private sector.
All Cambodian banks have signed up and agreed to cooperate and work together to improve the environmental and social risk management lending standards and safeguards capacity across their industry.
Currently, Mekong Strategic Capital continues to work together ABC to support Cambodian banks, as well as with local banks in Myanmar & Laos on the design and implementation of environmental and social standards with continued support from USAID, WCS and AFD.