ADB to end Asian upstream financing
The Asia Development Bank (ADB) published a draft energy policy for consultation on May 7 that would see the Philippines-based financier end support for upstream oil and gas projects.
"ADB will not finance any coal mining, oil and natural gas field exploration, drilling or extraction activities," the bank said. However, it will continue funding some gas projects including transmission and distribution pipelines, LNG terminals, storage facilities and gas-fired power plants, as well as gas for heating and cooking purposes, as long as certain conditions are met.
These projects must provide energy to consumers without access, or improve an existing service by replacing biomass stoves with gas-burning ones or using gas to provide last-mile electricity. They must also demonstrate that no other energy source could be used at an equivalent economic cost and producing less CO2, and must rely on high-efficiency technologies. Gas-fired power plants must lead to a net reduction in grid emissions, and demonstrate their alignment with mid-century carbon neutrality targets.
The ADB also vowed not to finance any new coal-fired heat and power generation. This is a largely symbolic move, as the bank has not funded any new coal stations since 2013, even though its current energy policy allows such support. It may support projects that mitigate the health and environmental impact of existing coal-fired plants but will steer clear of those that extend stations' operational life.
The bank did not give a timeframe for the implementation of its new policy. But its energy head, Yongping Zhai, told local press that the draft would be deliberated by its board of directors in October.