In its latest draft Energy Policy, the ADB has pulled the plug on coal financing, after years of active campaigning by civil society organizations to hold it to account for its record of financing dirty energy in the region. But while the Policy’s commitment to promoting clean energy is a positive development, it falls below the level of ambition needed to ensure its development financing supports a low-carbon and climate resilient future. For ADB to genuinely respond to the climate crisis in the region, we, as members of the civil society, believe that these principles must be reflected in its Energy Policy:

1. Alignment with Paris Agreement. Having pledged to align its financial flows to the goals of the Paris Climate Agreement, the ADB should ensure its Energy Policy meets the 1.5 degrees Celsius goal, 45% decline of global CO2 emissions from 2010 levels, and real zero CO2 emissions before mid-century. The ADB must remain steadfast in their commitment to decarbonization and transition to clean energy, which entails the complete withdrawal from coal, natural gas and oil infrastructures.

2. Priority to DMCs meeting their Paris Agreement commitments. Developing member countries must be provided by the ADB with financial and technical assistance to develop and advance renewable energy. Instead of imposing conditionalities and policy-based lending for its member countries, the ADB must provide financial and technical assistance needed to develop and advance renewable energy. To forward people-centered development, community-owned and led micro-grids should be made accessible as a source of renewable energy.

3. Universal energy access. The right to sufficient energy must be upheld by all governments and the global community, including the ADB. Last-mile electrification programs should cater to the most vulnerable and marginalized populations such as workers, farmers, fisherfolk and Indigenous Peoples. Special attention must also be given to rural communities, as the most affected from being the bank’s project sites. The ADB’s Energy Policy should be ramped up in ambition, at a scale that allows for both basic and aspirational needs.

4. People-oriented approach to the promotion of clean energy. Development and establishment of renewable energy systems must be consistent with the goals of promoting, protecting and realizing human rights, and ensuring a climate safe and equitable future for all. A detailed action plan must be provided by the ADB on how they intend to mitigate negative health, environmental and socioeconomic impacts caused through their coal projects, and will result from the transition to renewable energy. In securing energy access for all, the energy sector must be publicly owned, with the people exercising control over energy sources and systems.

5. Priority to local players in the energy sector, especially to micro, small and medium-sized enterprises. Despite the role of the private sector in the worsening climate crisis, the draft policy still focused on enhancing operations of multinational and transnational corporations in the energy sector.  Instead of catering to these corporations, support for local players, especially to micro, small and medium-sized enterprises through the transfer of technology and knowledge, must be provided. In addition, developing member countries’ governments should strictly enforce international and national regulatory mechanisms, while the private sector, including ADB, must genuinely comply with these processes.

6. “Do no harm” principle. Following this principle, potential risks and adverse impacts resulting from projects must be prevented, reduced and controlled. Techno-fixes for carbon capture, utilization and storage that do not effectively lessen emissions, must not be pursued by the bank. The bank’s safeguard policies that serve to mitigate negative impacts, should be properly implemented and observed by the ADB and its partners. Energy projects should not impede on people’s rights, development, peace and security.  

7. Effective development cooperation principles of democratic country ownership, focus on results, inclusive partnerships, transparency and accountability.  The ADB must respect the development priorities determined by developing member countries and its people. To ensure that its projects contribute to genuine inclusive and sustainable development, the bank’s processes must be inclusive and participatory, especially to the vulnerable and marginalized populations. In these processes, the bank must also recognize the role of the civil society as development actors, who have the duty and right to criticize and welcome policies. Transparency in its investments and accountability in its project implementation are also demanded from the bank.

As the bank updates its Energy Policy, we strongly urge the ADB to take immediate and concrete steps to adopt the following policy recommendations:  

1. End all direct and indirect financing for fossil fuels. The new ADB Energy Policy must definitively stop support for all fossil fuels projects -- gas, oil, and coal -- across the supply chain. Indirect support through related infrastructure, advisory services, technical assistance, or financial intermediaries should also be halted by the bank.

2. Decarbonize ADB’s operations and project portfolios. ADB’s Country Partnership Strategies (CPS), the bank’s primary platform for designing operations towards delivering development results at the country level, should be reviewed and updated to align with the Paris Agreement. Screening of projects in ensuring their alignment with both the CPS and national decarbonization plans that go through open and democratic deliberation, must be executed. The new ADB Energy Policy should account for greenhouse gas emissions on a project-level by screening other carbon-intensive projects. All power projects, including renewable energy projects, must comply with strict emission performance, the “do no harm” principle, development effectiveness principles and human rights standards.  

3. Promote universal energy access.  The ADB Energy Policy must address the issue of energy access as a common good to be provided as a public service. Prioritizing access to free energy for the energy-deprived, as well as modernization and upscaling of traditionally free and indigenous energy sources, is fundamental. Accessibility and affordability are the main considerations in delivering sustainable energy access. Thus, public, not private sector, financing will be critical in eradicating energy poverty and inequality in the region.

4. Scale up funding to sustainable renewable energy projects, and take a people-centered approach that ensures a climate safe and equitable future. To help developing member countries in achieving the Sustainable Development Goal of universal energy access (SDG 7), the ADB should realign investment in energy away from fossil fuels and carbon-intensive projects to micro-grid approaches, and publicly owned renewable and climate resilient energy systems.

5. Demonstrate commitment to development effectiveness principles. The ADB must uphold a people-centered and rights-based approach to development, which guarantees open participation, accountability and transparency. The Energy Policy needs to establish accountability and monitoring mechanisms to ensure that the bank invests in micro-grid and off-grid generating capacity, and not in extending traditional power structures and grid areas. The bank should establish a formal, systematic process for CSO input into the creation and implementation of these mechanisms. The Energy Policy must include those who lack energy access, particularly women, in the decision-making about their technical options, implementation, and impact monitoring. Real sustainability of development gains will only ensue if communities themselves recognize, understand, and drive the processes.