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Civil Society Groups Question ADB’s Energy Priorities; Urge Fit-for-Purpose Financing

MANILA, May 5 --As the ADB’s Annual General Meeting comes to a close, the NGO Forum on ADB and its member organizations take heed of the significant discrepancy between the Bank’s stated quest for delivering climate resilient, inclusive, and environmentally sustainable energy solutions while continuing to sink significant resources into developing outdated, unnecessary and risky cross-border energy schemes.

Although the Bank’s expressed energy sector priorities include supporting borrowing member states meet the SDG 7 targets for affordable, accessible and sustainable energy for all, decisions by its Board of Directors on budget allocation and the information on the Bank’s own project databases reveal a different story. With less than 10 out of nearly 300 active energy sector projects giving mention to decentralized, off-grid, mini or micro-grid solutions in the ADB’s database as of May 2021, only a fraction of sovereign and non-sovereign financing appears to be flowing into locally relevant, appropriately-scaled energy initiatives. As an analysis published in late 2018 by Oil Change International and the Big Shift indicated, less than 25% of ADB’s energy sector financing since 2014 had been specifically geared towards providing access to power for rural and marginalized populations.

For years, Forum members have consistently reported that the high voltage transmission lines, mega-dams as well as fossil gas pipelines and thermal plants, relied upon to power transnational energy trade, wreak havoc on peoples’ livelihoods and local ecosystems.

ADB’s support for regional energy integration schemes has repeatedly resulted in local people and allies denouncing the lack of meaningful consultation, forced displacement, unfulfilled compensation schemes, loss of livelihoods -- and in some instances, lives -- as well as environmental destruction associated with such investments. Among these projects are the Nam Ngiep 1 hydropower dam in the Mekong region, the Turkmenistan-Afghanistan-Pakistan-India gas pipeline in Central Asia, the Trans-Borneo Power Grid in Malaysia, and the Rupsha Combined Cycle Plant in Bangladesh as well as other power sector projects in South Asia. Beyond the impacts on local communities and the environment -- none of which can be simply compensated or off-set, these projects effectively undermine global efforts to limit climate heating to 1.5C.

Based on the recently released statements of the ADB concerning energy financing under Strategy 2030, the Forum and its members remain alarmed that the chronically low level of financing for initiatives which could provide households with equitable, dignified options for energy access appears set to continue.

As Avril De Torres, the Research, Policy, and Law Program Head at the Center for Energy, Ecology and Development in the Philippines explains: "We urge the bank to focus its efforts on energy systems that can make a dent in addressing climate vulnerabilities and energy access woes of Asian communities -- renewable energy micro-grids, in particular, are an innovation that must be pursued. Since they can be designed for any terrain, micro-grids have the potential to address the decades-old problem of full electrification in many developing countries. They would also empower communities by allowing them to harness power from their own backyards while managing the production and use of their electricity. ADB should see that today, the kind of development Asia needs is a sustainable one -- in which community-based renewable systems are the backbone."

Abhishek Shrestha, Program Director of the Digo Bikas Institute in Nepal adds: “It is time for the ADB to support decentralized energy models that are planned, owned and operated by the local communities. In contrast, large-scale projects financed by the ADB under its South Asia regional energy integration initiative are not fit for purpose -- they displace rural communities without their consent, dispossessing them of vast swathes of community forests, fertile land used to cultivate food, access to local water sources and sacred cultural sites. For justice to be upheld in practice, local community leadership and peoples’ meaningful participation need to be respected -- not sidelined in the interests of private sector power companies or by the Bank’s own appointed experts.”

Nipun Regmi, Director of the Energy and Climate Change Program at the Digo Bikas Institute asserts: “If rural mini-grids are designed only to address immediate needs, they fail to be sustainable, inclusive or resilient, instead leaving vulnerable communities with more financial burdens, social disparities and injustice in the long-run.”

Moving forward, we call on the ADB to align its energy financing priorities with the expressed needs of the diverse peoples across the Asia-Pacific -- shifting its funds towards supporting decentralized renewable power solutions as opposed to schemes that consistently lead to expanding oversized and unwieldy energy infrastructure” says Tanya Roberts-Davis, Inclusive Energy Planning Advocacy Coordinator for the NGO Forum on ADB.


The NGO Forum on ADB is a network of civil society organizations (CSOs) that has been monitoring the projects, programs, and policies of the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB).


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