Green Finance Catalyzing Facility – Blended Finance Mechanism Design and Due Diligence
People’s Republic of China, 2018
Client: Asian Development Bank
Role: Financial Specialist
Project Background and Objectives
The Green Finance Catalyzing Facility (GFCF) is an Asian Development Bank–supported blended finance initiative designed to address the People’s Republic of China’s substantial financing gap for green infrastructure and climate-aligned investments. The facility aims to leverage concessional public funds to catalyze private, institutional, and commercial (PIC) finance into bankable green infrastructure projects, supporting the country’s transition toward an ecological civilization and low-carbon development pathway .
Unlike traditional green finance approaches that rely primarily on the balance sheets of project sponsors, the GFCF adopts a project-centric strategy that proactively generates a pipeline of bankable green investments. The facility is structured to progressively increase financial leverage and complexity across multiple tranches, combining risk mitigation, innovative financial instruments, and capital market access to crowd in private capital.
SIET’s Role and Services
SIET provided targeted green finance and financial due diligence advisory support to the ADB project team as part of the facility’s preparation and early operational design. The scope of services included:
- Financial analysis of selected green infrastructure projects based on pre-feasibility studies
- Financial due diligence of pilot projects to assess bankability, risk profile, and financing structure
- Support to the development of financial models and analytical frameworks aligned with ADB guidelines
- Review of financial management, governance, and risk considerations related to the host financial intermediary
- Advisory input on mechanisms to internalize green benefits and improve project financial viability, including approaches to address unquantified environmental benefits
Outcomes and Value Added
SIET’s support contributed to strengthening the financial robustness and credibility of the Green Finance Catalyzing Facility by linking environmental sustainability objectives with rigorous financial analysis and risk assessment. The assignment helped ADB refine a blended finance framework capable of mobilizing significant private capital into higher-risk green infrastructure projects that would otherwise face financing constraints.
By supporting the development of a scalable, tranche-based financing approach, the assignment added value to the institutionalization and replicability of green finance mechanisms in the PRC, laying the groundwork for future expansion into capital markets and broader application across sectors and regions.