ADB Ventures' $1 billion investment to support Asean sustainable growth too

03, Jun. 2021

The Asian Development Bank (ADB) believes the Asia and the Pacific region can emerge stronger from the pandemic by focusing on key areas like climate action, green and digital infrastructure, regional cooperation and domestic resource mobilization. (Photo: ADB)
The Asian Development Bank (ADB) believes the Asia and the Pacific region can emerge stronger from the pandemic by focusing on key areas like climate action, green and digital infrastructure, regional cooperation and domestic resource mobilization. (Photo: ADB)

By Celine Chen

SINGAPORE, NNA - The venture arm of Asian Development Bank (ADB) plans to invest more than $1 billion of risk capital in promising startups by 2030 to support the sustainable economy in Asia Pacific such as Asean member-states.

Working with private sector partners like Plug and Play, ADB Ventures will invest in high-potential technologies in cleantech, clean energy, sustainable agriculture, food, inclusive fintech and healthcare solutions with the potential to scale to $100 million topline or more, according to their press release issued on June 1.

Plug and Play, a global innovation incubator and accelerator, will leverage its strong stakeholder network to support targeted startups' ability to grow in emerging Southeast Asian economies such as Indonesia, the Philippines, Thailand and Vietnam.

Suzanne Gaboury, ADB's director general for private sector operations, said, "Once we invest, ADB Ventures can add value through the Asian Development Bank's robust operational processes, safeguards, extensive networks, and considerable experience as a leading development partner in the Asia-Pacific. We believe this is why early-stage companies should want ADB Ventures in their investment rounds. We can help impactful companies scale faster."

ADB Ventures and Plug and Play are also collaborating to bring together corporations, governments and Investors to participate in regional accelerator programs to create substantial technological advancements and impact across multiple markets in the Asia Pacific. Both parties aim to onboard more partners to realize their vision.

Sherwin Pu, who leads ADB Ventures, "ADB Ventures has an insatiable hunger to connect with the best, most innovative, most dynamic, and most scalable impact technology startups in the Asia Pacific. Plug and Play has been a great resource for insights, investment deal flow, and introductions to relevant stakeholders in the region."

Plug and Play's global presence allows the company to access a huge network that covers more than 36 major cities in at least 15 markets, said Jupe Tan, managing partner of Plug and Play Asia Pacific, which is operating its sustainability vertical from Singapore.

Tan said, "Ultimately our partnership aims to play a part in making the world more sustainable, resilient, and overall, better adapt emerging technology startups to scale solutions in the region, focusing on circular economy, carbon neutrality, plastic reduction, and water resilience."

Although the Asean region has been enjoying significant economic growth driven by manufacturing and agriculture in the last decade, it has to tackle worsening environmental and health issues due to rapid development and climate change.

The outbreak of the COVID-19 pandemic, which is still plaguing the region, has forced Southeast Asian countries to pay greater attention to sustainability issues and climate change while struggling to put themselves back on the growth track.

On the positive side, Southeast Asia has an abundance of mostly untapped renewable energy resources such as solar and hydropower potential.

The discourse on nature-based solutions, as well as the ecosystem-based approach to mitigate the devastating impact of climate change, has gained more ground in the light of the current ecological and health crises, according to the Asean Centre for Biodiversity (ACB).

At a webinar held last December, ACB executive director Theresa Mundita Lim blamed climate change as one of the main culprits that caused the loss of nature and brought disasters that hit several Asean countries.

“However, the main paradox here is that biodiversity and its ecosystem services underpin our principal solutions and efforts to tackle climate change and its impacts. Without a healthy biodiversity, our fight against climate change would be an impossible feat,” she said.

Last month, ADB president Masatsugu Asakawa said the Asia and the Pacific region can emerge from the pandemic “even stronger than before” by focusing on priority areas such as ambitious climate actions, high quality green and digital infrastructure and deepening regional cooperation.

Such actions can build on ADB’s response to COVID-19 in 2020, he said. ADB's total commitments in 2020 hit a record high of $31.6 billion, with just over half supporting operations to deal with the pandemic.

The balance was committed to addressing long-term development issues such as climate change, and investments in quality infrastructure.

ADB set up the Asean Catalytic Green Finance Facility (ACGF) in 2019 to provide over $1.4 billion to support Southeast Asian governments in financing green and sustainable infrastructure projects.

"Infrastructure is the backbone of Southeast Asia’s economic growth, but the region faces a huge investment shortfall of more than $100 billion a year. To plug this gap, private capital must play a much larger role in financing infrastructure projects," said ADB.

The Green Climate Fund, a global fund for developing nations, has channeled $300 million to ACGF for sustainable economic recovery activities.

In March this year, Asean states set up the Asean Taxonomy Board to create uniform guidelines for sustainable business activities and investments in the region.

A key player in resolving Asia and the Pacific's biggest development challenges, ADB set up ADB Ventures in early 2020 to invest in technologies with the ability to contribute positive and scalable impact on climate change, gender equality as well as sustainable development in emerging Asia and the Pacific.

Health and sustainability are focus areas alongside financial Services, travel and hospitality for Plug and Play’s APAC headquarters in Singapore. Supporting startup growth in Southeast Asia, it also runs specialized programs in collaboration with partners such as the Alliance to End Plastic Waste.

Headquartered in Silicon Valley, Plug and Play has built accelerator programs, corporate innovation services and an in-house venture capital to speed up the progress in technological advancement worldwide.