📘 IAS Prelims 2025 — GS-I Q.35 | Classroom Explanation

(Current Affairs: Environment & Ecology)

📌 Question

Q.35) Which one of the following launched the ‘Nature Solutions Finance Hub for Asia and the Pacific’?

(a) The Asian Development Bank (ADB)
(b) The Asian Infrastructure Investment Bank (AIIB)
(c) The New Development Bank (NDB)
(d) The International Bank for Reconstruction and Development (IBRD)

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✅ Correct Answer: (a)

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🧑‍🏫 Classroom Explanation

This question tests awareness of multilateral development banks (MDBs) and their role in nature-based solutions and climate finance, a high-frequency UPSC current affairs area.

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🔍 Key Concept: Nature-Based Solutions (NbS) & Climate Finance

• Nature-based solutions use ecosystems (forests, wetlands, mangroves, soils) to:

• Address climate change
• Enhance biodiversity
• Support sustainable development

• Financing NbS is challenging due to:

• High perceived risks
• Long gestation periods
• Limited private capital participation

➡️ MDBs are stepping in to de-risk and catalyse private investment.

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🔍 Why Asian Development Bank (ADB)?

✅ Statement Validation

• The Asian Development Bank (ADB) launched the
Nature Solutions Finance Hub for Asia and the Pacific at COP28.

• Objectives of the Hub:

• Mobilise at least USD 2 billion for nature-based solution projects
• Focus on capital markets and private sector finance
• Scale up NbS investments across Asia–Pacific

➡️ Hence, option (a) is correct.

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🔍 How the Hub Works (UPSC-Relevant)

• The Hub deploys de-risking instruments, including:

• Guarantees
• Impact-linked payments
• Blended finance mechanisms

• Target:

• About USD 1 billion in de-risking funds
• From global development partners

• Purpose:

• Lower risk perception
• Crowd-in private capital
• Mainstream NbS into financial markets

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🧮 Logical Elimination (UPSC Style)

• ADB → Asia-Pacific focus, NbS hub launched at COP28 ✅
• AIIB → Infrastructure-focused, no such hub ❌
• NDB → BRICS-focused development bank ❌
• IBRD → World Bank arm, not this initiative ❌

➡️ Correct option: (a)

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🎯 Final Answer

✅ Correct Answer: (a) The Asian Development Bank (ADB)

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📦 Info Box — Extra Points (Prelims Value Add)

• ADB headquarters: Manila, Philippines
• Established: 1966
• India is a founding member

• Relevance for India:

• Financing mangroves, wetlands, forests
• Linking biodiversity conservation with climate mitigation

• UPSC Trap Alert:

• AIIB ≠ all Asia-related finance initiatives
• COP announcements often involve MDBs, not UN bodies

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📍 GS Mapping

GS Paper III
Theme: Environment, Climate Change
Topic: Climate Finance, Nature-Based Solutions
Nature: Current Affairs + Institutions

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