May 24, 2023
Wind power plant project in Vietnam
On May 22, the Japan International Cooperation Agency (JICA) established the Facility for Accelerating Climate Change rEsilient and Sustainable Society (ACCESS), a debt facility of up to US$1.5 billion, as part of its private sector investment finance operations.
This facility was established as part of Japan's contribution in light of Prime Minister Kishida Fumio's statement on May 20, 2023 at the G7 (Group of Seven) Hiroshima Summit—at the side event on the Partnership for Global Infrastructure and Investment (PGII)—that the G7 would contribute to the sustainable development of partner countries through public and private infrastructure investment.
[Background of the Facility]
In 2015, the international community adopted the Paris Agreement, which states that efforts need to be taken to limit the rise in global temperatures from pre-industrial levels to well below 2°C, preferably to 1.5°C. At the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26), it was confirmed that this 1.5°C target will be pursued.
Meanwhile, with bilateral public financial support from developed countries having not reached the scale required by developing regions, globally, the private sector is becoming a mainstream source of financing, especially in the renewable energy sector. According to the International Renewable Energy Agency (IRENA), the private sector financed 86% of the investment in renewable energy development between 2013 and 2018, and it is expected that it will continue to be responsible for much of the financing required to achieve the 1.5°C target.
The facility aims to provide financing for the following types of projects:
(1) Infrastructure projects that contribute to climate-change mitigation (renewable energy, afforestation, EV projects, etc.) and adaptation (agriculture, water and sewage, etc.)
(2) Small- and medium-scale climate-change projects through loans given to financial institutions
(3) Projects by private companies promoting climate-change action (including Sustainability-Linked Loans and Green Loans)
Total amount of facility: up to US$1.5 billion
Financing terms and conditions: normal terms and conditions for private sector investment finance are applied.
Co-financing: co-financing with international development finance institutions (MDBs), bilateral development finance institutions (DFIs), or commercial banks of G7 countries with strong track records is required.
Period: five years from the establishment of the facility
The facility will contribute to the achievement of SDGs (Sustainable Development Goals) Goal 13 (Climate action), among others, through specific activities related to climate-change mitigation and adaptation. The facility, which promotes climate-change action projects through the private sector, is an initiative based on JICA’s Global Agenda No. 16, "Climate Change," and will also contribute around 1 trillion yen annually to climate-change action support as well as doubling the amount of GHG emission reductions, as stated in the JICA Sustainability Report.
JICA, in collaboration with other development finance institutions and the private sector, will support climate-change measures by private companies in developing regions to achieve the agency's mission of human security and quality growth.