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Asian Development Bank to Discontinue Financing Coal Project

The Asian Development Bank (ADB), under its draft energy policy, has announced to discontinue financing any new coal-fired capacity for power and heat generation or any facilities associated with new coal generation.

 

ADB will not finance any coal mining, oil and natural gas field exploration, drilling or extraction activities.

 

ADB will support developing member countries (DMCs) to mitigate the health and environmental impact of the existing coal-fired power plants and district heating systems through financing of emission control technologies.

 

A review of the policy will be conducted in 2025 to measure the progress in energy technologies to support DMCs and enhance their commitments towards carbon neutrality. It will also continue to use a wide range of financial instruments to provide the most targeted and effective support for its DMCs.

 

It will continue financing energy infrastructure and other interventions through financial assistance, primarily project loans, and associated technical assistance.

 

The selection of policy measures ranges from technology neutral policies, such as carbon trading and tax, to highly specific regulation aimed at individual technologies, such as building codes for energy efficiency or feed-in tariff for the accelerated deployment of on-shore wind power.

 

It believes that policy-based lending can play an important role in supporting the energy sector reforms, commercialisation, and enactment of new energy policies necessitated by more stringent climate commitments.

 

In 2020, ADB had sanctioned USD 231 million loan to develop the Lower Kopili Hydroelectric Power facility in Assam. Earlier, it had signed an agreement to invest USD 15 million in Avaada Energy to help expand the company’s solar generation capacity in India.

 

ADB has also pledged to improve efficiency in supporting development programmes that involve small and widely dispersed subprojects common in rural electrification, clean cooking, island energy supply, and demand-side energy efficiency programmes.

 

ADB also supports DMCs in cross-border and sub-regional electricity interconnection infrastructure development. In a move to help DMCs meet their climate goals, ADB will prioritise projects that pursue the large-scale deployment of renewable energy resources and the integration of variable renewable electricity at scale to wide-area grids created electricity interconnection.

 

It will refrain from supporting dedicated cross-border transmission lines linked to coal-fired power plants.

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