"We believe ACP provides an innovative platform to deploy capital into climate-related transactions across Asia that are designed to generate attractive returns," Todd Freeland, director general of ADB's private sector operations department, said in a statement.
Asian economies are outperforming many in the rest of the world, which in turn means more energy demands. The Asian Development Bank said expanding Asian economies are facing significant environmental challenges in the way of poor air quality, inefficient energy infrastructure and inadequate supplies.
The bank said there's a legacy of poor capital investment in the area of low-carbon solutions. Renewable energy and resource efficiency programs could be ripe for major growth for Asia given the right investment climate.
The joint venture will be funded by $400 million from the founding partners. ACP will have headquarters in Hong Kong.
"The substantial resources that the founding partners are committing to ACP will help position it as the preeminent investor in this asset class in Asia from day one," Freeland said.