FOR IMMEDIATE RELEASE
May 7, 2021
Fossil Free ADB reaction to Asian Development Bank draft energy policy
The Asian Development Bank issued its draft energy policy on Friday following the conclusion of its 54th Annual Meeting and clarion calls from the United Nations to end financing for all fossil fuels including gas. This is the first time the policy has been updated since 2009 and the final version, to be approved by the board by October 2021, will guide the bank’s investment decisions until an interim review in 2025. This first draft has ruled out financing for coal but allows for continued gas finance which dominates the ADB’s fossil fuel lending.
While the draft rules out finance for gas extraction for the first time, it says the ADB will continue to consider finance for gas transmission and distribution pipelines, LNG terminals, storage facilities, gas-fired power plants, gas for heating and cooking when five conditions are met. These include improving energy access, comparing projects with the cost of renewable alternatives, and showing a plan for long-term carbon neutrality. However, the conditions are only broadly defined and the draft policy says details will be issued in a separate staff guidance rather than being open for public consultation.
On Thursday, UN Secretary General Antonio Guterres called on international financial institutions like the ADB to stop funding fossil fuel projects, saying “We can no longer afford big fossil fuel infrastructure anywhere.” His comments followed the release of a new UN report which clearly states that gas cannot be considered a bridge fuel and called for urgent steps to cut methane emissions to reach the Paris goal of keeping global temperature increase below 1.5 degrees Celsius.
Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development (APMDD) said
“The ADB must stop funding gas and oil projects. Support for the expansion of all types of fossil fuels must end. There must be a swift and early phase-out of existing fossil fuels projects with an accelerated and just transition to clean, renewable and democratic energy systems. Further, we will also call on the ADB to cancel debts especially those incurred from harmful projects such as fossil fuels.”
Rayyan Hassan, executive director of NGO Forum on ADB said
“The new draft Energy Policy announcing an end to coal finance is much-delayed justice for all the affected communities across Asia impacted by ADB coal projects. We urge the ADB to move towards a full transition to renewable energy finance through solar and wind as soon as possible.”
Gerry Arances from the Center for Energy, Ecology, and Development (CEED), Philippines said
“With its draft policy, ADB is setting a high climate leadership standard for other international banks in their stance on coal–but only if its pledge to abandon coal is translated into a clear roadmap for phasing out existing fleets. We urge the bank to pour into renewable energy systems that will power the sustainable development Asia needs today. Microgrids, in particular, with their capacity to address electrification woes in our nations, to empower communities to manage and enjoy the full benefits of their own energy systems, and even to generate much needed green jobs, must be prioritized. The COVID-19 pandemic revealed weaknesses of current carbon-intensive systems of unreliability and costliness, among others – all of which community-based renewables can help address. ADB is already actively pursuing efforts to drive the post-COVID recovery of its developing member countries, and would be hitting two birds with one stone if it integrates the advancement of climate-responsible and resilient microgrids in them.
To this end, we caution that continuing to support gas, as it declared it would, will only be a detour in the road to a thriving renewable energy sector in Asia. We urge ADB to thoroughly consider its fossil gas policy in terms of a full alignment to the 1.5°C Paris goal. A concrete phaseout plan for gas should also be already in the works.”
Vidya Dinker of Indian Social Action Forum and Growthwatch, India said
“ADB at 54 is finally catching up, and we welcome that. It is a battle hard fought by communities long-suffering pollution and destruction by their projects and policies in India and across Asia, and today they can finally look forward to reparations. We reaffirm our struggles and commitment to hold ADB accountable.”
Hasan Mehedi from CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh said
“The ADB has to urgently phase out fossil gas to achieve the Paris Goal of staying below 1.5 degrees Celsius.”
Susanne Wong, senior campaigner of Oil Change International said
“By leaving the door open for gas, the ADB is ignoring 96% of their fossil fuel finance and painting it as climate leadership. As a public bank dedicated to achieving a ‘prosperous, inclusive, resilient, and sustainable Asia and the Pacific,’ the ADB must rule out gas and focus on helping countries leapfrog to clean energy.”
Petra Kjell, Campaigns Manager at Recourse, said
“ADB’s coal exit is a first step towards realising a fossil free ADB. Public development banks such as ADB must now put people and planet at the heart of their operations, ruling out remaining harmful energy choices like gas.”
- A Fossil Free ADB briefing from last week showed that the Bank has spent $4.7 billion financing gas projects since the Paris Agreement. The Bank’s gas finance accounts for over 96% of the Bank’s fossil fuel financing from 2016-20.
- The Asian Development Bank has not had any direct finance for coal projects since 2013. However, indirect support for coal through financial intermediaries may have continued and the new draft policy has not ruled it out.
- Fossil Free ADB is an international coalition of NGOs and movements working to pressure the ADB to end its financing for fossil fuels.
- The conditions for continued gas finance are laid out in paragraph 87 of the ADB draft energy policy.