Groups echo ADB watchdog arm’s call for the bank to withdraw from coal
Clean energy groups on Tuesday welcomed the recommendation of the Independent Evaluation Department (IED) of the Asian Development Bank (ADB) for the Bank to reassess its energy policy and formally back out from financing commitments for new coal-fired power plant projects in the region.
The recommendation came following an assessment of the ‘ADB Energy Policy and Program, 2009–2019’, which found that with an approved $42.5 billion worth of energy investments, ADB as a leading financier in a region that “has the highest demand for natural resources and the largest emissions of greenhouse gases contributing to climate change” can “play a key role in helping address these serious environmental challenges through its energy policy.”
“The findings of the IED echo what environmental and climate-vulnerable groups have long been saying – that ADB must no longer dally in fully embracing its role as a climate actor. It is only by ending its coal financing, with the subsequent goal of a full decarbonization, that the bank can truly contribute to transformative and climate-responsible development in Asia,” said Gerry Arances, Executive Director of think-tank Center for Energy, Ecology, and Development (CEED).
CEED has been conducting a review of the ADB’s energy lending portfolio, initial findings of which reveal that ADB had been profiting from high-carbon development projects and strategies, contrary to the bank’s pronounced recognition in its energy policy of climate imperatives.
“At first glance, the mix of its energy generation projects in the past decade is impressive, with only 19% of the total relying on fossil fuels. Looking at the installed capacity of these projects, however, we see that at least half or 14.2 GW of the power produced is from coal, fossil gas, and oil. The ADB is instrumental in Asia’s reality of a continued reliance on coal and other fossil fuels, which exposes it to issues of energy security and affordability as what happened during this pandemic,” explained Arances.
CEED is part of a broad network of civil society organizations engaging the ADB on its role in the energy sector and climate space.
“The ADB likes to think of itself as a green bank, but the truth in this is found not in its press releases but in the Bank’s energy investments portfolio. And, as the IED found, ADB in the last decade has been guided by an outdated, fossil fuel marred energy policy that made possible its dirty commitments and legacy of bringing to life the next generation of coal technology in Asia,” said Rayyan Hassan, Executive Director of NGO Forum on ADB.
According to Hassan, the IED’s recommendation should stir an urgent alignment of the Bank’s energy policy and investments to climate realities and the goal of an ecologically just and participatory energy transition.
“Through a new, ambitious energy policy, the ADB can play the catalytic role of leading the financing for Developing Asia’s clean energy transformation. We urge the bank to align its policy to the Paris Agreement with a 1.5°C goal, paying no heed to false solutions or any form of polluting energy, especially coal. It should aim to fully decarbonize its energy supply, while also promoting and supporting renewable energy innovations,” he said.