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ADB announces coal exit in draft energy policy

MANILA, May 7 -- The Asian Development Bank (ADB) through its draft energy policy announced today that it will not finance any coal mining, oil, and natural gas field exploration, drilling, or extraction activities, and it will no longer finance any new coal-fired capacity for power and heat generation or any facilities associated with new coal generation.


Gerry Arances from the Center for Energy, Ecology, and Development (CEED), Philippines stated “we are happy that ADB finally decided to abandon coal once and for all in this draft policy. By seeking to ‘support the phase-out of coal-fired power plants in the region’, ADB finally recognizes the need to rectify its mistake of causing the suffering of many communities in the Philippines and across Asia through the coal-fired power plants it helped build.”


Hasan Mehedi from CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh said that “this is sweet victory after a long fight. We also remind ourselves that we have miles to go! ADB still has to urgently phase out fossil gas, waste to energy, and large hydro projects to achieve the Paris Goal of staying below 1.5 degrees.”


Impacted communities and civil society organizations worldwide that have been urging the ADB to stop funding coal see this as a landmark decision.


It’s a victory to the civil society especially to NGO FOUM ON ADB who have advocated the ADB to make it a fossil-free bank. We continue to demand ADB stop financing other high carbon-emitting technologies such as gas and waste to energy” says Hemantha Withanage from Centre for Environmental Justice, Sri Lanka.


Glenn Ymata, Energy Campaigner of NGO Forum on ADB said “we welcome the draft of the new Energy Policy of the ADB and commend the bank’s effort to consider the issues and concerns as well as the recommendations from the communities and civil society organizations, specifically on coal and nuclear financing. However, there are still other critical issues that need to be addressed like gas, geothermal and waste-to-energy, we are expecting that the ADB will continue involving the civil society in finalizing the draft because of the climate, environmental, social, and human rights imperatives.

The ADB also indicated in the draft energy policy that it would support Developing Member Countries (DMCs) to mitigate the health and environmental impact of existing coal-fired power plants and district heating systems by financing emission control technologies.

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,” says Vidya Dinker of Indian Social Action Forum and Growthwatch, India.


Ikromjon Mamadov from Youth Group for the Protection of the Environment, Tajikistan said that “it is a small step towards abandoning coal today but can be a huge contribution to preserving the future of our planet and humanity.”

However, Bank watchers see this policy as a reason to raise new risks for the gas industry. Rayyan Hassan, executive director of NGO Forum on ADB explained that “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 (Phulbari Coal mine Bangladesh, Tata Mundra Coal project India, Visayas Baseload and Masinloc Coal Project Philippines, Jamshoro Coal project Pakistan). We commend this very immediate move away from coal by the ADB in its Energy Policy review this 2021, as we are at the brink of a climate apocalypse as there is hardly any time left to avert global temperature rise beyond 1.5 degrees.


Hassan also explained that the ADB is still gridlocked in LNG and gas finance, as well as harmful WTE incinerator projects, and large hydropower plants which all contribute to increasing concentrations of GHG. “We urge the ADB to take the coal moratorium ahead and move towards a full transition to renewable energy finance through solar and wind as soon as possible.

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