The Asian Peoples’ Movement on Debt and Development (APMDD) warned that while the Asian Development Bank (ADB) will no longer finance new gas and oil projects, the multilateral institution’s new energy policy may not lead to making developing Asia fossil-free.
On Wednesday, ADB announced that it has approved the 2021 Energy Policy, which seeks to guide Manila-based energy investments in the next five years.
APMDD said the new policy will continue to finance midstream and downstream projects, which could continue fueling demand for these projects.
“New energy policy but backing for fossil fuels remains. The ADB falls short in efforts to be fossil-free. It failed to go all the way in ridding the energy policy of the exceptions and loopholes that allow for fossil fuel financing,” APMDD Coordinator Lidy Nacpil said in a news statement.
Nacpil also expressed concern over ADB’s plans to withdraw from coal projects. An earlier draft of the policy used the term “rapid” in reference to the phase out of coal, but the approved energy policy no longer describes the phase out of coal projects in this manner.
APMDD also raised concerns that projects using thermal-based waste-to-energy; biofuels and biomass energy; and construction of large and mega hydropower and geothermal sources of energy will continue to be financed by ADB.
These projects threaten to increase human-rights violations; displace communities and local livelihoods; and undermine staple food production and access.
Nacpil said these projects also trigger land grabs and water and land use conflicts and threaten natural carbon sinks and ecological integrity.
“We also find unacceptable ADB’s support for carbon capture, use, and storage technologies for power plants and industries. ADB ignored the fact that CCUS [carbon capture, utilization and storage] technology is capital intensive, unreliable, unproven, and dangerous, even with objections raised by the CSOs [civil society organizations] on several occasions,” Nacpil said.
On Wednesday, ADB Energy Sector Group Chief Priyantha Wijayatunga said the main feature of the policy is the bank’s decision to cease financing for new coal-fired generation capacity in the region.
Wijayatunga said, however, that ADB’s last financing for coal-fired power plants was the Jamshoro Thermal Power Station in Sindh province in Pakistan. Based on ADB documents, the project is still active and has financing until June 2027.
Apart from veering away from coal investments, Wijayatunga said the new Energy Policy aims to accelerate the development of sustainable and resilient energy systems that provide reliable and affordable access to energy for all.
This is part of ADB’s commitment to foster inclusive economic growth and social development, as well as support the low-carbon transition in Asia and the Pacific. This, he added, will also ensure a just transition for those negatively affected by the energy transition.
ADB said the new policy is based on these principles—Securing Energy for a Prosperous and Inclusive Asia and the Pacific; Building a Sustainable and Resilient Energy Future; and Supporting Institutions, Private Sector Participation, and Good Governance.
ADB said the principles also include Promoting Regional Cooperation and Integration and Integrated Cross-Sector Operations to Maximize Development Impact.
These principles will allow the new Energy Policy to meet the Paris Agreement and the Sustainable Development Goals (SDGs), particularly SDG 7 on achieving Universal Access by 2030.