(ATF) The Asian Development Bank, the region's biggest multilateral lender, has come under fire over its loans to the fossil fuel sector, with activists saying the bank doesn't do enough to promote climate change mitigation.
A group of non-governmental organisations called on ADB on Monday to swiftly end loans to polluters, as the bank holds its annual meeting this week with a focus on a green economic recovery.
The ADB, which finances initiatives aimed at boosting economic prospects for Asia's poorest, is also reviewing its lending policies, which its own management has said are not fit for a climate-changed world.
In March, the Green Climate Fund (GCF) allocated $300 million to support ADB efforts to help Southeast Asia shape a climate-resilient, environmentally sustainable economic recovery from the coronavirus pandemic.
The Association of Southeast Asian Nations (ASEAN) aims to leverage GCF and ADB funds to catalyse financing to support more than $4 billion worth of green infrastructure projects across the region.
“The ACGF Green Recovery Program is designed to kickstart a cycle of low-emissions investments during the first few years of a COVID-19 recovery,” Ahmed Saeed, ADB vice-president, said.
“The programme will help Southeast Asian countries design green stimulus packages and projects that will create climate-friendly jobs, boost economic growth, and help countries fulfill their pledges under the Paris Agreement to reduce greenhouse gas emissions.”
But more than 20 non government organisations said ADB is not doing enough.
"It's time to power our communities with clean, renewable energy," Chuck Baclagon, regional campaigner at 350.org, a US-based group focused on the global energy transition, said in a joint statement.
"We need financial institutions like the Asian Development Bank to immediately stop lending money for coal, gas and oil projects," Baclagon said.
The groups said the ADB has lent $4.7 billion to gas projects in Asia since December 2015, when about 200 nations signed the Paris Agreement.
The bank is reviewing its energy policy, which was last updated in 2009, Zhai Yongping, chief of ADB's energy sector group, told Reuters. A draft new policy will be posted for public discussion by June, Zhai said.
Governments this year have stepped up climate action as US President Joe Biden seeks to reverse measures by the Trump administration. ADB's biggest shareholders, Japan and the US, recently raised their emissions cuts targets.
ADB hosts its annual meeting virtually this week with the theme "Collaboration for Resilient and Green Recovery".
The bank has "invested about $25 billion in the energy sector during 2015-2020," with 45% of that directed to renewable energy and energy efficiency and another 35% to network upgrades to integrate more renewable energy, Zhai said.
The bank supports natural gas projects that provide community access to cleaner cooking and heating fuels, Zhai said, adding the "management agreed with (an) independent evaluation that its energy policy is no longer adequately aligned with the global consensus on climate change."
With reporting by Reuters