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Group says ADB financing of gas projects in Asia Pacific undermines climate commitments

Civil-society organizations (CSOs) in the region disclosed that the Asian Development Bank (ADB) spent a total of $4.7 billion to finance various gas projects.

In a news statement, CSOs said gas expansion poses one of the greatest threats to meeting the goals of the Paris Agreement and averting the very worst impacts of the climate crisis.

They said financing these projects undermine the commitments made by the Manila-based multilateral development bank to further its climate and efforts to achieve a “prosperous, inclusive, resilient, and sustainable Asia and the Pacific.”

“The ADB is meeting to discuss ‘collaboration for resilient and green recovery,’ but every dollar the ADB spends on gas and other fossil fuels undermines those efforts. Recovery can only be green and sustainable if the recovery funds do not include any support for dirty gas, coal and oil projects, which are fueling the climate crisis and harming communities and ecosystems,” Sophie Richmond, coordinator of the Big Shift Global said.

According to Carbon Brief, gas played a larger role in increasing global emissions than coal in every year between 2013 and 2019.

Of the ADB’s $4.7 billion in financing for gas, the majority was allocated for gas-fired power plants at 44 percent and exploration/extraction at 21 percent, according to the analysis by the Fossil Free ADB coalition and Oil Change International.

The Fossil Free ADB campaign was created by the coalition to prompt the ADB to stop fueling the climate crisis and end financing for fossil fuels.

“The ADB knows better. The Bank knows fossil fuel energy is a key driver of climate change and that its members are among the most climate-threatened in the world, and yet the ADB still finances fossil fuel projects in our region. We demand the ADB stop financing coal, gas and oil,” Lidy Nacpil, coordinator of the Asian People’s Movement on Debt and Development (APMDD) stated.

Further, the coalition said the ADB is playing a critical role in laying the groundwork for gas infrastructure development and expansion in Asia through its technical assistance program.

The ADB approved $11.1 million in technical assistance grants from 2016-2020 to help governments prepare to build out gas pipelines, power plants and LNG terminals across Asia. These grants have had an outsized impact per dollar relative to loans and guarantees.

The coalition is calling on ADB to scale up investments for renewable energy, including grants available for public and social ownership of integrated systems, energy efficiency, community microgrids to maximize energy access, and just transition for workers and communities dependent on fossil fuel production.

To demonstrate real climate leadership, the ADB must align all financing and activities—including private sector financing and financial intermediation—with a high probability 1.5 degrees celsius emissions pathway and ensuring meaningful consultation with impacted communities.

“The climate crisis sends us a clear warning: we can’t keep powering our lives with dirty fuels from the last century. It’s time to power our communities with clean, renewable energy. To do so, we need financial institutions like the Asian Development Bank to immediately stop lending money for coal, gas and oil projects. We demand their leadership in this transition by excluding fossil fuels in their investment portfolios and by putting in place more stringent environmental safeguards in their investment policies,” Chuck Baclagon, regional campaigner at 350.org, Asia said.

Meanwhile, NGO Forum on ADB network believes ADB can do more to minimize damage to the environment and the communities it serves, particularly now that the bank is also updating its 2009 Safeguard Policy Statement (SPS).

In a separate news statement, NGO Forum on ADB noted that in a 2015 report of its Independent Evaluation Department (IED), the bank has not yet delivered its safeguards effectively due to its reliance on consultants.

Further, the IED has also recommended in its 2020 report that Country Safeguard Systems are not ready in the region to deliver on ADB SPS. Therefore, the onus remains on ADB to ensure that its safeguards are provided across all operations.

“The safeguards review should address the problems identified by the IED report in 2015 and 2020 about non-effective safeguards delivery, noncompliance of FI and ignorance of the weaker CSS of the borrowing countries. If the root causes of those problems are not addressed, even the new ‘modernized’ SPS—as the ADB safeguards team loves to say— would face the same problems in the implementation,” said Titi Soentoro of Aksi!, an organization focused on gender, social and ecological justice in Indonesia.

To ensure vulnerable groups, women, children, Indigenous Peoples, and people with disabilities are not harmed by ADB operations, NGO Forum on ADB said the upcoming ADB SPS review has to ensure that project-affected communities and civil society are meaningfully consulted in the process.

In essence, the ADB SPS is all about the communities and civil- society advocates who support and advocate for them throughout ADB operations.

NGO Forum on ADB Policy Analyst Nadeen Madkour also said there is a need to focus on affected communities. He noted that in 2017, a gas cylinder blast claimed the lives of six Vietnamese workers in the ADB-funded Nam Ngiep 1 Hydropower Project in Borikhan, Lao.

Madkour also said a similar incident occurred in Cambodia where a “social and physical cataclysm” followed the resettlement of more than 4,000 families living on the dilapidated railway tracks.

“The bank’s projects particularly those operationalized by the Private Sector Operations Department [PSOD] have been linked to the grave human-rights violation,” Madkour said.

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