ADB launches $6B initiative and institutional support to deepen ASEAN capital markets

The Asian Development Bank (ADB) has announced plans to mobilize up to $6 billion by 2030 and provide institutional support to capital market regulators in Southeast Asia to accelerate the development of the region’s capital markets and strengthen its long-term financial resilience against external shocks. The funds raised through these instruments will support projects in renewable energy, energy efficiency, sustainable transport, and affordable housing, among other infrastructure that supports more inclusive and resilient communities, the bank said in a statement on last Friday. It is noted that capital markets are essential for mobilizing the private finance that countries need for infrastructure in various sectors like energy, transport, healthcare, and education. ADB’s support package will include policy-based financing to help countries strengthen the enabling environment for domestic capital market development and deepen integration across the region. The bank will also provide support to strengthen regulatory frameworks, enhance market infrastructure, and help to create the conditions for companies and governments to issue more sustainable finance instruments. ADB will also help countries translate policies into transactions by investing in securities issued by companies across the region and expand its support to help issuers – including governments and private companies in ASEAN – structure and issue more bonds for sustainable investments. By helping to stimulate greater bond issuance across the region, ADB’s $6 billion initiative is expected to help unlock up to $30 billion in increased investments in the region’s capital markets by 2030. Under the initiative, ADB will continue working closely with the ASEAN Capital Markets Forum (ACMF) – a high-level grouping of capital market regulators from all 11 ASEAN jurisdictions. The bank will support the forum by hosting an ACMF office at the bank’s headquarters in Manila. “Deep capital markets provide much needed resilience to external shocks, and while ASEAN’s capital markets have grown significantly, they have not reached the scale needed to support the region’s long-term development ambitions, “The initiative we are announcing today will help deepen domestic and regional markets, strengthen local currency bond markets, and drive greater institutional investor participation. This is now more important than ever given today’s volatile global environment,” said ADB President Masato Kanda at the 13th Association of Southeast Asian Nations (ASEAN) Finance Ministers and Central Bank Governors’ Meeting. Last month, ADB announced that it was stepping up its support for ASEAN as its main bank. Last week, the bank launched a new trust fund to finance feasibility studies and other critical preparation work for the major projects envisaged under the ASEAN Power Grid. ADB is also developing regional initiatives to build AI readiness, develop the blue economy, and strengthen river basins’ resilience. Addressing the conflict in the Middle East, Kanda reiterated that ADB remains ready to provide tailored financial support to its developing member countries to help mitigate the economic impacts. This includes fast-disbursing budget support, trade and supply chain support to keep essential imports moving, and targeted assistance for vulnerable communities. ADB launches $25M fund to accelerate progress on ASEAN Power Grid