As the Asian Infrastructure Investment Bank (AIIB) concludes the public consultation period for its Energy Sector Strategy Update 2022, civil society groups on Monday called on the Beijing-based bank to do right by its core values of being ‘lean, clean, and green’ and ambition of advancing sustainable, affordable energy in Asia by closing loopholes in its energy policies that allow financing for fossil gas, coal, and other destructive energy.
A report from think-tank Center for Energy, Ecology, and Development (CEED) and regional civil society network NGO Forum on ADB reveals that despite support provided to develop solar and wind projects while avoiding direct financing for coal, the AIIB goes against climate imperatives and risks tying the region to decades more of continued fossil fuel dependence through fossil gas investments and indirect support to coal, among other loopholes.
“The AIIB has yet to achieve its “Lean, Clean, and Green” ambitions. The Energy Strategy blueprint in 2016 failed to close loopholes for fossil fuel financing, leaving these ambitions in danger of becoming empty promises. However, the 2022 Energy Sector Strategy Update provides an opportunity for AIIB to translate its promise into a policy that can deliver concrete change,” said Executive Directors Gerry Arances of CEED and Rayyan Hassan of NGO Forum on ADB in the report, which was submitted to the AIIB at the conclusion of its April 8 to July 15 consultation period.
The groups raised alarm over the bank’s growing preference for fossil fuels, as 11 of the 36 energy projects approved by the AIIB from 2016 to the first quarter of 2022 are fossil fuel focused infrastructures. With 10 projects, of which generation projects amount to nearly 2 GW, fossil gas (natural gas) accounts for the largest number of approved projects for a single type of energy source.
“Claiming climate and energy leadership can be within reach of AIIB, if only it chooses to divert its attention to genuinely sustainable renewables. Instead, it touts fossil gas as a transition fuel, encouraging a massive gas expansion even as fuel prices and supply insecurity are at their all time high. With fossil gas, AIIB goes against the development interests of host countries, tying them to high electricity rates and a catastrophic climate future,” said Avril De Torres, CEED Deputy Executive Director and co-author of the ‘Greening the AIIB’ report.
Civil society groups from across the world also registered dissatisfaction over AIIB’s online consultation process that was neither meaningful nor inclusive, with its tight window to communicate concerns and lack of transparency. CEED and NGO Forum on ADB are hopeful that the report can assist in steering the bank’s direction towards climate action.
“Energy policies of big financial institutions like AIIB can make or break the climate fate of vulnerable peoples across all regions of the Bank's member countries, particularly those communities dispossessed to make way for the development of fossil fuel and other large-scale power projects still being supported by the Bank. With such implications, one would think AIIB as a development bank would exert the utmost effort to consult with stakeholders on the updates that need to happen in its energy investments, but that has not been the case. Now that the consultations have ended, we urge the AIIB to publish the feedback it has so far received and to open another round of comments for its updated policy prior to board approval,” said Tanya Lee Roberts-Davis, Energy Policy and Campaigns Strategist from the NGO Forum on ADB.