ADB to give priority for accessible energy to marginalised people for sustainable growth

Asian Development Bank (ADB) has sought to promote cleaner cooking and heating solutions to the people from developing member countries (DMCs), who are living without access to modern energy systems.

The multilateral lending institution in its proposed 2021 Energy Policy has planned to expand its investment in the sector. "The proposed policy is consistent with Strategy 2030 and its seven operational priorities," said the ADB in a press note.

Progress on access to energy has been rapid across developing Asia and the Pacific, reaching an overall electrification rate of 96 per cent in 2019, which is a 16 per cent increase since 2010. However, the electrification rates of individual DMCs vary widely and many power systems continue to be hampered by unreliable supply.

Currently, about 940 million people in Asia and the Pacific still experience frequent interruptions, about 350 million people do not enjoy an adequate supply, and about 150 million people still have no access to electricity. The issue of how to achieve adequate, reliable, and affordable universal access will therefore remain on the agendas of governments as well as national and international development financing institutions.

According to ADB, persistent and widespread unequal access to energy services makes it imperative to prioritise support to all disadvantaged and vulnerable groups—women, the poor, racial and ethnic minorities, indigenous peoples, people with disabilities, older persons, and other marginalized people. To achieve its objectives, the ADB has targeted to focus its energy sector operations in five policy principle areas.

In its first policy principle, ADB will support efforts to bring affordable, reliable, sustainable, and modern energy to all, so as to eradicate extreme poverty and reduce social inequalities. The second policy principle will be targeted for providing support to its DMCs to tackle climate change, enhance environmental sustainability and build climate and disaster resilience.

In the third policy principle, ADB will support the institutional development, financial sustainability, and good governance of energy sector institutions and companies as well as private sector participation. It will also assist in creating the policy frameworks needed to manage the energy transition. Promotion of regional energy cooperation and the integration of energy systems to strengthen energy security and increase cross-border access to cleaner energy sources will be among its key priorities, the press  note reads.

Similarly, ADB has sought to give continuity to combine finance, knowledge, partnerships, and its country-focused approach to deliver integrated solutions with comprehensive and magnified development impacts.

ADB raises climate finance to $100 billion

 The Asian Development Bank (ADB) today announced it is elevating its ambition to deliver climate financing to its developing member countries (DMCs) to $100 billion from 2019 to 2030.

“The battle against climate change will be won or lost in Asia and the Pacific,” ADB president Masatsugu Asakawa said, adding that the climate crisis is worsening daily, prompting many to call for increased climate finance. "We are taking action to meet this call by elevating our ambition to $100 billion in cumulative climate finance from our own resources by 2030."

In 2018, ADB committed to ensuring at least 75 per cent of the total number of its operations support climate action and its own climate finance resources reach at least a cumulative $80 billion by 2030. Today’s announcement elevates the ambition of this financing.

ADB expects the cumulative climate financing from its own resources in 2019–2021 to reach about $17 billion.

The expanded climate finance ambition is a key element of ADB’s efforts to support its DMCs. Facing the interconnected challenges of the coronavirus disease (Covid-19) pandemic and the climate crisis, many DMCs are taking bold action to promote a green, resilient, and inclusive recovery, the mulyilateral development partner said.

The additional $20 billion will provide support for the climate agenda in five main areas:

First, new avenues for climate mitigation, including energy storage, energy efficiency, and low-carbon transport. ADB expects its cumulative climate mitigation finance to reach $66 billion.

Second, a scale-up of transformative adaptation projects. Projects in climate-sensitive sectors, such as urban, agriculture, and water, will be designed with a primary purpose of effective climate adaptation and enhanced resilience. ADB expects its cumulative adaptation finance to reach $34 billion.

Third, an increase in climate finance in ADB’s private sector operations. This includes creating more commercially viable projects for both ADB and private investors. The expansion will be underpinned by improvements in operational efficiencies, a post-pandemic recovery in market demand for financing, new technologies and innovations in climate financing, and new areas of business for private sector climate operations. ADB intends to support these initiatives with $12 billion in cumulative private sector climate finance from its own resources and anticipated crowding in of an additional $18 billion to $30 billion.

Fourth, support for a green, resilient, and inclusive recovery from Covid-19, including through innovative financing platforms such as the ASEAN Catalytic Green Finance Facility and Green Recovery Platform, which are expected to leverage funds from capital markets and private sector investors for low-carbon infrastructure.

Fifth, support to advance reforms in DMCs to unlock actions through policy-based lending to support policies and institutions for enhanced climate resilience and climate mitigation.

Across these areas, ADB will continue to expand access to new, climate-focused technologies and mobilize private capital toward climate finance.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members, 49 from the region.