Introduction Southeast Asia boasts rich biodiversity and unique ecosystems, but the region now faces a growing environmental crisis: the degradation of its river systems. These rivers sustain millions of people by supporting agriculture, fisheries, and access to clean water. They play a vital role in advancing several Sustainable Development Goals (SDGs), especially SDG 6 (Clean Water and Sanitation), SDG 13 (Climate Action), and SDG 14 (Life Below Water). Local communities depend on healthy waterways and preserving them contributes directly to global environmental and social objectives. Yet industrial pollution, agricultural runoff, and urban waste continue to degrade these rivers. To address this urgent challenge, policymakers must implement effective measures, including nature-based solutions (NBS). These approaches require robust financing, not only through traditional public-private partnerships (PPPs), but also via innovative mechanisms such as blue bonds and blended finance, which can unlock new sources of capital and scale up impact. This article is adapted from a report published by the Asian Development Bank (ADB). The Growing Cost of River Pollution River pollution in Southeast Asia creates complex and far-reaching consequences. It harms biodiversity, accelerates climate change, and threatens livelihoods and public health. First, pollution disrupts aquatic ecosystems, many of which host endemic species already at risk of extinction. In the Chao Phraya River, pollution has degraded water quality so severely that only an estimated 30 out of 190 indigenous fish species can still reproduce in the river’s mainstream (IUCN, 2018). This loss of biodiversity weakens ecosystem functions and directly affects surrounding communities. Second, polluted rivers emit greenhouse gases like methane, which result from decomposing organic waste. These emissions contribute to global warming. Projections show that Southeast Asian countries will experience slower economic growth due to climate change. For example, Malaysia and Thailand may see growth rates 20% lower than in a no-warming scenario by 2050. Factors such as reduced agricultural productivity, infrastructure damage, and declining labor productivity (driven by poorer health outcomes) could explain this trend. Third, Southeast Asia’s major rivers support millions of livelihoods. They enable vital economic activities like farming and fishing, which provide both food and income. In the Citarum basin, rice farmers have reported a 50% drop in harvests and a decline in rice quality, which they attribute to dye pollution from textile factories. These compounding effects highlight the urgent need to take stronger action against river pollution and protect the resources that millions rely on. Solutions for Cleaner and Healthier Rivers Southeast Asia must tackle river pollution through a combination of nature-based and policy-driven approaches, supported by effective financing mechanisms. Nature-based solutions, such as constructing wetlands and reforesting mangroves, leverage the natural purifying functions of ecosystems. These methods not only filter pollutants but also restore biodiversity and strengthen ecological resilience. While Southeast Asia has only begun to adopt wetlands for pollution control, momentum is building. For example, Indonesia launched a nationwide peatland restoration initiative to rehabilitate 2.6 million hectares of degraded peatlands. In Thailand, the King’s Royally Initiated Laem Phak Bia Environmental Research and Development Project increased dissolved oxygen levels by 32% and reduced phosphate levels by 88% at its mangrove forest site. These results demonstrate how NBS can enhance the performance of manmade wastewater treatment systems. Policy measures also play an important role in shaping behaviors and reducing pollution. Instruments like pollution taxes and extended producer responsibility shift the burden of waste management to polluters, encouraging more sustainable practices. Viet Nam has led the way by piloting the Payments for Forest Environmental Services scheme, which requires water supply, hydropower, and tourism companies to pay fixed rates to forest conservation service providers. These providers protect watersheds and preserve landscape aesthetics. However, policymakers still face challenges in measuring impact and conducting accurate economic valuations. To succeed, they must design water pollution taxes that precisely target pollution sources and establish transparent frameworks for calculating, collecting, and allocating revenues. Institutional coordination is essential to implement these policies effectively. Governments must cooperate across national and local levels to ensure enforcement and accountability. The Mekong River Commission (MRC) exemplifies this approach. As a leading intergovernmental organization, the MRC produces critical data and promotes basin-wide cooperation to support sustainable development. Still, implementation gaps remain especially in linking upstream development projects to incentive or penalty mechanisms based on environmental impact indicators. Financing underpins all these efforts. Governments traditionally rely on public budgets, international aid, and development loans. However, new and innovative financing mechanisms are emerging. Raising awareness and understanding of tools like blue bonds and blended finance will unlock additional funding sources, which are crucial to combat river pollution in Southeast Asia. Financing Innovation for River Protection Despite ongoing efforts, Southeast Asia continues to face a significant infrastructure financing gap that threatens its path to sustainable growth. The Asian Development Bank estimates ASEAN’s total infrastructure investment needs at $2.8 trillion (baseline) and $3.1 trillion (climate-adjusted), translating to $184 billion annually to reduce poverty and $210 billion to address climate change. For biodiversity alone, the Paulson Institute, The Nature Conservancy, and others estimate a global annual financing gap of $711 billion. These figures underscore the urgency of adopting innovative financing strategies that can mobilize capital at scale to protect Southeast Asia’s river ecosystems. Blue bonds offer one such solution. Governments and institutions issue these bonds to raise capital from impact investors for marine and freshwater projects with measurable environmental benefits. Southeast Asia has only recently begun to explore this tool. The Philippines issued its first blue bond in 2022, followed by Indonesia’s groundbreaking $150 million sovereign blue bond in 2023—the first of its kind aligned with International Capital Market Association (ICMA) principles. However, identifying suitable projects and evaluating their environmental impact requires specialized expertise. To scale blue bonds effectively, stakeholders must establish clear standards and transparent frameworks to ensure credibility and impact. ADB Thailand’s Green Social Sustainable Bonds (GSS+) Initiative supported EXIM Bank’s first blue bond in July 2024, which was oversubscribed by 2.5 times, demonstrating strong investor interest in financing blue projects. Public-private partnerships also play a critical role in addressing water infrastructure challenges. While no one-size-fits-all model exists, countries like Malaysia and Thailand have launched sector-level PPP initiatives, and the Philippines has developed a resilient regulatory framework. These efforts have expanded service coverage and improved efficiency. To scale water PPPs across the region, governments must act on three fronts: (1) establish holistic water governance frameworks, (2) create enabling environments through fiscal support, and (3) design bankable, competitive transactions. ADB continues to support PPP programs at both national and project levels, offering a foundation for nature-focused initiatives. Blended finance mobilizes private capital by combining it with public and concessional funding. The Philippine Water Revolving Fund (PWRF), launched in 2008, exemplifies this approach. It provides loans to local governments and water districts by blending commercial financing, public funds, and official development assistance. This structure lowers borrowing costs and encourages private sector participation in water and sanitation projects. To replicate this success across Southeast Asia, stakeholders must tailor financing structures to project-specific risks and incentives. The ASEAN Catalytic Green Finance Facility (ACGF), managed by ADB since 2019, offers another scalable model for blended finance at both national and regional levels. From Challenges to Scalable Action Tackling river pollution requires a comprehensive and flexible financing strategy. Authorities must pursue a mix of solutions tailored to local contexts. To build a pipeline of bankable projects that can deliver measurable impact, Southeast Asia must take three key steps: Build capabilities to develop strong project proposals with clear risk-return profiles. Increase inter-agency cooperation to ensure coordinated and efficient implementation. Pilot innovative financing mechanisms to build investor confidence and demonstrate proof of concept. Several regional and international initiatives already support this agenda. Examples include the following ADB initiatives: the Climate Tech Hub in the Republic of Korea, the Nature Solutions Finance Hub (NSFH), the GSS+ Bonds Initiative, and the ASEAN Catalytic Green Finance Facility (ACGF). The NSFH, in particular, aims to catalyze finance for nature-positive investments by developing scalable, bankable demonstration projects and offering practical nature-based solutions through innovative financing models. ADB has also supported impactful projects such as the $500 million Plastic Marine Debris Reduction Program in Indonesia, the Cambodia Sustainable Coastal and Marine Fisheries Project, and the blue bond issuance in Thailand. These examples illustrate how technical assistance, capacity building, and project development support can help governments and agencies assess feasibility, design full-scale solutions, and replicate successful models. By learning from these initiatives and building on existing momentum, Southeast Asian countries can accelerate progress toward cleaner rivers, healthier ecosystems, and more resilient communities. Resources Asian Development Bank (ADB). 2020. Asian Water Development Outlook 2020. ADB, UNEP, and UNDP. 2022. Financing the Blue Economy: Investments in Sustainable Blue Small-Medium Enterprises and Projects in Asia and the Pacific. ADB. 2023. Innovative Financing Can Help Bridge Southeast Asia’s Infrastructure Financing Gap. (accessed 10 September 2025). International Union for Conservation of Nature (IUCN). 2018. Protected Planet Report 2018. Gland, Switzerland: IUCN. O. Jitthaisong et al. 2012. Water Quality from Mangrove Forest: The King’s Royally Initiated Laem Phak Bia Environmental Research and Development Project, Phetchaburi Province. Marine Policy. Organisation for Economic Co-operation and Development (OECD). 2019. Biodiversity: Finance and the Economic and Business Case for Action. Paris: OECD Publishing. R. Tirumala and P. Tiwari. 2022. Innovative Financing Mechanism for Blue Economy Projects. Marine Policy, 139. UNEP. 2016. A Snapshot of the World’s Water Quality—Towards a Global Assessment. Nairobi: UNEP. Ask the Experts Anouj Mehta Country Director, Thailand Resident Mission, Asian Development Bank Anouj leads the full range of work related to the planning, implementation, and supervision of TRM’s vision, goals, strategies, and work plan, in alignment with ADB’s overall objectives and its engagement with an upper-middle-income country. Before joining ADB, he worked as an investment banker and chartered accountant at JP Morgan Chase and PwC in London. Follow Anouj Mehta on Manuela Cavaccini Cataldo Partners and Knowledge Management Specialist, Thailand Resident Mission, Asian Development Bank Manuela supports the implementation of the Nature Solutions Finance Hub. Prior to this role, she monitored the rollout of four green initiatives: the GSS+ Bonds, Nature Solutions Finance Hub, Zero Source Pollution, and the OneADB Green Blue Initiative. Before joining ADB, she gained over 10 years of international experience in business development, project management, and partner engagement across the public and private sectors. Bingxun Seng Partner, EY Bingxun is a partner at EY and leads the Economics Advisory practice in Singapore. He is an experienced economist with 15 years of expertise in providing strategic policy advice to governments, private entities, multilateral development organizations, and nonprofits across Southeast Asia. For example, he collaborated with ADB to propose reform recommendations that support the recovery of key sectors in Southeast Asia following the coronavirus disease (COVID-19) pandemic. Asian Development Bank (ADB) The Asian Development Bank is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—49 from the region. Follow Asian Development Bank (ADB) on Leave your question or comment in the section below: View the discussion thread.