In a report, Catalyzing Green Finance: A Concept for Leveraging Blended Finance for Green Development, it called for an integrated approach to transforming countries’ financial systems so they could develop a large pipeline of bankable green infrastructure projects.

It set out the concept of a green finance catalysing facility (GFCF), which would serve as a model for countries to create their own financing vehicles and implementation.

A GFCF would leverage public funds to secure finance from private sources for green infrastructure investments.

Public money would be used to mitigate investors’ risk and mobilise additional funds from the capital markets.

ADB’s vice-president for knowledge management and sustainable development Bambang Susantono said: “A paradigm shift in infrastructure planning and design is an imperative for dynamically changing Asia.

“The choice that Asia makes in bridging infrastructure gaps will have profound implications for its people and the planet.”

He added: “The publication is timely in providing practical institutional solutions for enhancing countries’ financial systems to help them chart a greener, more sustainable future.”

ADB said it commissioned the report to respond to a persistent shortfall in member countries’ infrastructure investments, which it said amounted to $1.7tn annually until 2030, taking into account climate change mitigation and adaptation costs.

Green financing vehicles would help meet these needs while ensuring the best use and conservation of scarce natural resources.

ADB in August set up a green climate fund and this month raised $1.25bn from green investment bonds.