The five-year programme (2021-2026) could help spur investments in energy, water, waste management, transport, logistics, and green buildings to benefit people and businesses in six South Asian countries.

The European Union is set to allocate a fund of $21.5 million to help accelerate climate-smart and inclusive infrastructure investments in Bangladesh and five other South Asian countries.

The five other countries are India, Bhutan, the Maldives, Nepal, and Sri Lanka, according to a press release of the International Finance Corporation (IFC), the largest global development institution, yesterday.

The IFC will implement the project under the programme, “Accelerating Climate-Smart and Inclusive Infrastructure in South Asia (ACSIIS)”.

The ACSIIS is a five-year programme (2021-2026) to help spur investments in energy, water, waste management, transport, logistics, and green buildings to benefit people and businesses in Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka. It would leverage $850 million of private sector investments in the region.

The impact of Covid-19 on investments in infrastructure has been widespread and severe. Investment commitments in infrastructure with private participation in 2020 dropped by an unprecedented 52 per cent from 2019 levels, said the IFC in the press release.

The IFC estimates that South Asian countries can unlock more than $3 trillion of climate-smart investment opportunities by fully meeting the national targets under the Paris Agreement by 2030.

“Attracting private capital for climate-smart infrastructure in a sustainable and inclusive manner will be critical for post-Covid-19 recovery in South Asia,” said Hector Gomez Ang, regional director for South Asia at the IFC.

“The EU’s support for the programme could not come at a better time as it is vital to act now to unblock obstacles to spurring sustainable infrastructure projects. This programme will leverage IFC’s experience and expertise in supporting climate-smart infrastructure development in the region,” he added.

The programme will also support the development of climate-smart investments in agriculture, manufacturing, tourism, health, and education while focusing on key themes such as cities, gender, and green finance.

The latest initiative builds on the IFC’s previous partnership with the EU to support the Eco-Cities Programme in India and other programmes in the region.