The Asian Development Bank‘s will boost its climate financing goals by $20 billion to a new target of $100 billion for the 2019-2030 period. They are aiming to launch its concept for retiring coal-fired power plants at the COP26 climate conference in Scotland. The plans, disclosed by ADB President Masatsugu Asakawa, increases a previous $80 billion goal for climate financing for developing countries in Asia.
Asakawa said that the fight against climate change will be won or lost in Asia and the Pacific. They are committed to serving as a climate bank. The additional $20 billion in financing support will provide support for climate mitigation efforts such as low-carbon energy sources, climate adaptation projects and private sector projects. Asakawa added that the ADB now plans for $66 billion for climate mitigation financing through 2030. The Manila-based lender will plan for climate adaptation financing of $34 billion.
The bank also plans to boost its private sector operations. More private sector can be attracted, capital to finance new climate technologies and innovations. ADB was working with major financial firms to develop a mechanism. This is to buy up coal-fired power plants in Asia. Asakawa said that the group has finished an initial feasibility study. Now they are embarking on a longer study of the concept in three target countries such as Vietnam, the Philippines and Indonesia.
ADB and its partners such as the British insurer Prudential, lenders Citi and HSBC and BlackRock Real Assets, are aiming to complete and launch a pilot investment fund in 2022. The concept is not included in the ADB’s overall climate financing goals. A study by the Institute for Energy Economics and Financial Analysis estimated that retiring half the coal power plants in Indonesia, the Philippines and Vietnam would require as much as $55 billion. The ADB will announce the partnership to design and establish the Energy Transition Mechanism (ETM) at COP26.
Asakawa said that even now, some philanthropists have already shown interest in investing in this new initiative. So they plan to launch the ETM at COP26 in Glasgow. Asakawa added that he hopes to be able to present the plans along with Indonesian Finance Minister Sri Mulyani Indrawati and Philippines Finance Minister Carlos Dominguez.