BAKU, Azerbaijan, June 29
By Nargiz Sadikhova - Trend:
The NGO Forum on ADB encourages the ADB’s decision for not to finance any coal mining, oil, and natural gas field exploration, Executive Director at NGO Forum on ADB, Rayyan Hassan told Trend.
On May 7, 2021, Asian Development Bank (ADB) through its draft energy policy announced that it will not finance any coal mining, oil, and natural gas field exploration, drilling, or extraction activities, and it will no longer finance any new coal-fired capacity for power and heat generation or any facilities associated with new coal generation.
“Honestly, in my opinion, I wish it was five years earlier, I think it is five years too late. ADB notoriously, since its 1964 history till 2012 was one of the largest financers of coal in the world. It was building coal power plants in South Asia, in Southeast Asia, in the Philippines, it was building coal everywhere, coal was a big part of ADB's investment portfolio,” Hassan said.
Hassan noted that by 2013 there was a very controversial ADB-financed project - Tata Mundra Coal Plant in India.
“This was coal project financed in cooperation with IFC. And this particular project led to the displacement of over 1,000 fisherfolk in India. There was extreme pollution of the river next to where the coal plant was, where the fishing population died. In addition to the marine impact the power plant was also contributing to severe coal ash and air pollution, it was really a terribly destructive project,” he said.
Later, he noted, the local fishermen with the help of civil society organizations filed a lawsuit against the IFC in US courts, and the WB Group was questioned over this coal power plant. The lawsuit brought to light whether International Financial Institutions such as IFC should remain immune from national law, especially when irreparable harm has been done.
“ADB itself faced a formal complaint in its Accountability Mechanism filed by the fishermen demanding compensation for the loss of livelihood and environmental damage. It was all over the media, it was a terrible, terrible project,” he noted.
So, Hassan said, the ADB was getting a lot of bad press because of the Tata coal project, and the Visayas Baseload Coal project in the Philippines was also being blamed for similar harms to local people. Eventually, the ADB started to realize that coal was leading to controversy.
“Even though it was their own policy, the last coal project they financed was Jamshoro plant in Pakistan in 2014. So from 2014 till 2021, for the last seven years ADB has not financed a coal power plant,” he said.
“There is still coal power plants, but you will notice that there is a lot of financing coming in from China, there is Japanese coal-fired power plants, Korean power plants, but multilateral development banks, I think because of the international recognition of renewables being more and more competitive the financiers have started to realize that coal is much more expensive problem than it was before. So at this point, the ADB like most IFIs has realized just how bad the coal is for long-term business as the future is in renewable energy. Coal is dying and the ADB wants out of it,” he said.
The finalized version of the ADB Draft Energy Policy is expected to be submitted to ADB’s Board of Directors for consideration by October 2021.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
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