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NGO forum demands ADB to stop financing climate change

Updated: Dec 12, 2018

The Asian Development Bank (ADB) 6th Asia-Pacific Climate Change Adaptation (APAN) Forum starts today and will run until October 19, 2018.

This year’s theme focuses on resilience and avoiding the worsening impacts of climate change, although these efforts are not being discounted, the ADB once again portrays itself as a champion of clean energy, committing $2 billion a year to clean-energy investments, but it still continues to support coal-based power projects.

“Having these events and forums are helpful in raising awareness regarding climate change but what we want is for the Bank to divest entirely from coal and other fossil fuel financing as well as clear transition plan to sustainable and socially acceptable renewable energy projects” say’s Rayyan Hassan, executive director of NGO Forum on ADB. “ADB’s total financing for coal projects is estimated at a staggering $10.74 billion from 2009 to 2017 ” he added.

The Bank has not shown any sign of slowing down when it comes to coal financing particularly on the projects that are already existing like the Korea Electric Power Corp.’s 200-megawatt (MW), the coal-fired power plant in Naga, Cebu, and the Masinloc Power Partners Ltd.’s 600-MW coal-fired thermal power plant in Zambales. In the Philippines alone, ADB financed over $120 million in the Cebu project, while putting in $200 million in the Zambales plant.

“Climate change will have its impact on the poorest and the most vulnerable, quoting the ADB, they encounter more intense tropical storms, more severe and more frequent droughts, and floods, accelerated melting of glaciers and rises in the sea level, higher frequency of forest fires, shortages of freshwater, threatened crop production and aquaculture, higher incidence of heat-related and infectious diseases, but still the Bank does not intend to stop funding projects that promote climate change” says Sreedhar Ramamuthi of Environics Trust, a grassroots organization based in New Delhi, India.

In a recent press statement of NGO Forum on ADB, in relation to the World Bank Annual Meeting, the Forum pointed out that the ADB approved its Strategy 2030, which does not explicitly describe ADB’s energy investment strategy for the coming decade. The Forum fears that in the section titled Unlocking Private Capital most of the energy portfolio will be hidden. This will make big-ticket energy investments opaque and inaccessible to transparency and accountability. There will be no way to verify what forms of energy projects will be selected for financing and how will they be bank rolled.

Furthermore, ADB has set up a clean technology fund or CTF through which in 2013 has financed - without meaningful consultation or attention to environmental or social safeguards - over 150 Million USD in geothermal energy projects in Indonesia alone. Geothermal technology and gas projects are still riddled with underlying environmental impacts including GHG emissions. The recent earthquake and tsunami in Indonesia shows the tectonic balance of volcanic island states are fragile; therefore any massive geothermal expansion plans may prove to be critically sensitive in triggering further instability in the archipelago.

Furthermore, ADB has provided direct support in the name of "clean energy" for the notorious mega-infrastructure Financial Intermediary, PT Sarana Multi Infrastruktur, (PT SMI) with a well-documented track record of violations of environmental and social safeguards. Given that the majority of geothermal projects in Indonesia are targeted at forest areas inhabited by Indigenous and other forest-dependent peoples, lack of attention to the environmental and social impacts is a tremendous problem.

Titi Soentoro from Aksi! for gender, social and ecological justice, an organization based in Indonesia emphasized that “ADB is currently attempting to place Indonesia's entire National Energy Company (PLN) under "borrower system" rules instead of requiring mandatory implementation of all ADB Safeguards. Given the dismal environmental and social track record of PLN and the borrower system, this call into question any claims of a focus on clean technology with meaningful environmental and social safeguards”.

NGO Forum on ADB demands that the Bank should provide a clear plan of action on transitioning from Fossil Fuel energy to fully renewable energy investments and to ensure and publicly commit that these investments - including existing investments -- are carried out under fully implemented ADB safeguards with mandatory meaningful consultation with the affected communities, strict avoidance of forced resettlement, and with careful and documented adherence to environmental safeguard requirements. Forum also demands that ADB private sector investments in energy should be made fully transparent and binding to all ADB operational policies and guidelines.

In addition, the transition from Fossil Fuel to renewable energy must have clear indicators and targets to meet the Paris Agreement objectives; with mandatory gauges including gender-disaggregated documentation of environmental and social impacts, how to prevent those impacts, information disclosure, consultation, and avoidance of land evictions.

NGO Forum on ADB calls for the Bank to review its draconian 2009 Energy Policy and align its energy lending portfolio with countries respective Nationally Determined Contributions (NDCs) as per Paris Agreement.


Written by Jen Derillo. Jen is NGO Forum on ADB's Program Coordinator for Communications.


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