Bloomberg Philanthropies and Goldman Sachs have committed $25 million (£18.3m) for a new fund that aims to advance clean energy solutions in South and Southeast Asia.

The Climate Innovation Fund, managed by the Asian Development Bank (ADB), is said to have the potential to unlock up to $500 million (£366m) in private sector and government investments.

It will initially support projects with “direct, measurable positive climate-related outcomes” in the most carbon intensive areas of India and Vietnam, with the investment focusing on clean energy systems, sustainable transport, energy efficiency and adaptation activities.

According to Bloomberg New Energy Finance, South and Southeast Asia are key markets for clean energy development due to lower generation costs of wind and solar power and improving economics of energy storage.

India has installed 38.7GW of wind and solar capacity over the last four years and the market is expected to grow to 17GW per year by 2025.

However, it adds countries in South and Southeast Asia are also home to extensive coal reserves and continue to support the development of coal-fired generation.

Michael R. Bloomberg, Founder of Bloomberg LP and Bloomberg Philanthropies said: “As we work to rebuild economies devastated by the pandemic, we have the opportunity to make progress on another deadly crisis we are facing – climate change. By investing in solutions that will create jobs and spur economic growth now, we can also make economies more resilient for generations to come.

“India and Vietnam are dynamic and growing markets, and both have the potential to lead the way in the global fight against climate change. This fund will give them access to the capital and direct investment they need to do just that and I’m looking forward to working with our partners at Goldman Sachs and the Asian Development Bank as we expand our efforts in the region and help other countries do the same.”