Civil society organizations (CSOs) expressed its support for the call of the Independent Evaluation Department (IED) that the Asian Development Bank (ADB) should revisit its energy policy and avoid financing new coal projects.
In a statement, a coalition of people’s movements across Asia demanding greater action to tackle climate change has called on ADB to heed the recommendations made by IED in its recently-issued evaluation report of the ADB energy policy.
Lidy Nacpil, coordinator of the Asian People’s Movement on Debt and Development, said multilateral development banks have a crucial role in achieving the goal of the Paris Agreement to limit the rise of global average temperature to 1.5 °C and stabilize global temperature, preventing catastrophic climate change.
“It is an urgent recommendation and articulates what should have been done yesterday. And so we say to ADB: We await your immediate coal exit,” Nacpil said.
In an email to BusinessMirror, the IED said the ADB approved $2.06 billion in financing for coal-fired power plants between 2009 and 2019.
The IED said the financing for coal-fired power plants located in Pakistan, Philippines, China and Viet Nam, accounted for a total of 4.8 percent of the total financial support of ADB for the energy sector.
The report stated that the ADB approved $42.5 billion for the energy sector between 2009 and 2019, the second largest sector allocation after transport.
“With respect to financing coal-fired power plants—a contentious issue in the past few years—there is a disconnect between what the policy formally allows and what ADB finances in practice,” the IED said in the report.
“[The] ADB’s stance on financing coal-fired generation is not consistent, as the Energy Policy 2009 allows such financing but [the] ADB refrains in practice from investing in these projects, which confuses counterparts and other stakeholders,” IED added.
At last year’s Asia Clean Energy Forum, the CSOs said then ADB President Takehiko Nakao said the bank has plans to stop funding coal-fired power plants except in selected countries where the bank considers the alternatives to be limited.
Based on 2015-2016 data of the think-tank E3G, ADB’s fossil finance is slightly higher than its energy related climate finance at a ratio of 1:0.9.
“Despite its declarations that it is committed to clean energy, ADB is still funding coal and fossil fuels. In the past few years, it has invested in fossil gas and related infrastructure across Asia and in coal projects, such as the controversial 4,000-megawatt Tata Mundra Ultra Mega Coal plant in the Indian state of Gujarat and the Jamshoro coal-fired power plant project in Pakistan,” added Nacpil.
The IED also recommends that ADB update its energy policy to emphasize climate change mitigation and adaptation as a core priority, and place higher emphasis on promoting a more active high-level engagement with developing member countries in their energy sectors.