The Asian Development Bank (ADB) is planning to stop financing coal mines and power plants and curtail its funding for oil and gas production, according to a draft of an updated energy policy released last week.
“The ADB said it hasn’t financed a coal power plant since 2013, when it supported the conversion of Pakistan’s Jamshoro plant to run on coal instead of heavy fuel oil,” Climate Home News reports. “But under the draft policy, the bank will formally exit all coal financing, except to mitigate the environmental impact of existing coal plants or decommission them. It committed not to support any projects to upgrade existing coal facilities that would extend their lifespan.”
The bank said draft policy reflected “profound changes in the energy landscape” since it last updated the policy in 2009, adding that the current version “is no longer adequately aligned with the global consensus on climate change”. It said the ADB’s support for a coal exit across the continent would “support new job creation in cooperation with local communities and stakeholders”.
The new policy would still allow the bank to support gas transmission and distribution infrastructure, Climate Home says. The draft is now out for consultation, with the final policy due to be approved in April.
Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development (APMDD), called the new policy “a big victory for communities and movements who resisted for decades ADB’s funding of dirty energy, including coal projects”. But Climate Home says campaigners are already pushing the bank to exclude gas transmission infrastructure from financing.
“Our campaign is far from over,” Nacpil said. “The ADB must also stop funding gas and oil projects. Support for the expansion of all types of fossil fuels—not just coal—must end.”
Tim Buckley, director of energy finance studies at the Institute for Energy Economics and Finance Analysis (IEEFA), greeted the policy shift as a “step in the right direction”, reflecting “a phenomenal momentum” in Asia’s energy transition in recent months. “The greater Asia region is moving at a million miles an hour,” he told Climate Home.
But “a lot of markets in Asia really need to see evidence that renewables can be deployed at the scale needed,” he added, with the result that as countries like Japan and South Korea step away from coal, they’re embracing natural gas.
“For Buckley, ADB’s policy on restricting methane gas does not go far enough,” Climate Home writes. “In countries like Vietnam, methane gas has become a higher source of greenhouse gas emissions than coal, he said, largely because of methane leaks—a greenhouse gas with a warming potential more than 80 times that of carbon dioxide.”