Hong Kong can unlock capital to fill Asia's US$800 billion climate-finance gap, AIIB says

South China Morning Post

Wed, Sep 17, 2025, 5:30 AM 4 min read

Hong Kong can help Asia fill a staggering climate-financing gap by helping to tap a global pool of more than US$200 trillion to fund sustainable-infrastructure projects, according to the Asian Infrastructure Investment Bank (AIIB).

There was a glaring disconnect between the vast amount of available capital and the low deployment of funds for climate action in the Asia-Pacific region, said Lim Kim-see, the bank's chief investment officer for public sector and funds clients, in an interview.

"We really need the private sector to come into financing, because governments around the world lack fiscal capacity to meet the vast amount of investment needed to achieve the nationally determined contributions," she said.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

Global assets under management with institutional investors such as pension funds, sovereign funds, private-equity funds and financial institutions exceeded US$200 trillion, Lim added.

The region needs investment of at least US$1.1 trillion a year to meet mitigation and adaptation needs, but actual investment is falling short by about US$800 billion, according to the International Finance Corp (IFC).

That said, global investors are beginning to increase their allocations to the region.

In the first half of the year, about six percentage points of global climate funding shifted to the region, marking the first notable reallocation of climate-themed capital towards Asia in more than seven years, according to a report from Bank of China (Hong Kong) and MSCI.

Since 2015, more than US$300 billion in labelled sustainable bonds had been issued across Southeast Asia and the Greater Bay Area, reflecting the rapid maturing of the region's sustainable-finance market, the report said.

Lim Kim-see, chief investment officer of the Asian Infrastructure Investment Bank, pictured at Four Seasons Hotel in Central on September 12, 2025. Photo: Edmond So alt=Lim Kim-see, chief investment officer of the Asian Infrastructure Investment Bank, pictured at Four Seasons Hotel in Central on September 12, 2025. Photo: Edmond So>

However, institutional investors holding vast capital, mostly in North America and Europe, were "seeking what is perceived to be safer investments", Lim said. Blended finance - combining capital with different levels of risk - could "attract these investors and give them the comfort to come and invest in the high-risk assets in emerging markets".