New $35m fund to accelerate climate action and energy transition in Asia
Kelvin Ross
Posted on: 14 April 2023
Pact between Asian Development Bank and the Global Energy Alliance for People and Planet will tackle coal phase outs and scaling energy storage.
Pact between Asian Development Bank and the Global Energy Alliance for People and Planet will tackle coal phase outs and scaling energy storage
The Asian Development Bank and the Global Energy Alliance for People and Planet (GEAPP) have announced a new capital fund to accelerate clean energy access and transitions in countries across south and southeast Asia.
The initiative was unveiled today (Friday April 14) during the World Bank Spring meetings and will cover a host of countries including India, Indonesia, Vietnam, Pakistan and Bangladesh.
GEAPP is an alliance of philanthropy – including IKEA Foundation, The Rockefeller Foundation, and Bezos Earth Fund – governments and technology, policy, and financing partners.
It will provide an initial $35 million of capital towards the fund, which will be established and administered by ADB.
The purpose of the fund is to tackle climate change and energy access challenges in Asia and beyond.
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Priority programnes will include supporting battery energy storage systems in Vietnam, and the early retirement of coal plant initiatives in Indonesia.
Opportunities will be supported through technical assistance, grant components for investment projects, and blended concessional instruments to crowd-in additional capital.
ADB’s managing director Woochong Um said: “We welcome this support from GEAPP which will help ADB in two of our most important priorities as Asia and the Pacific’s climate bank.”
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“First, expanding clean energy for the 350 million people in our region who have either limited or no access to electricity. And second, catalyzing the transition from coal and other fossil fuels toward clean, affordable, and reliable energy sources.”
Robust economic growth, demographic expansion, and increased urbanization have accelerated energy demand growth in Asia.
Yet a lack of reliable and affordable energy access via traditional electricity distribution systems, paired with high upfront capital costs for advanced technologies and energy storage have hindered the region’s progress to date.
GEAPP aims to reduce four gigatonnes of future carbon emissions, expand clean energy access to one billion people, and enable 150 million new jobs.
Its chief executive Simon Harford said “there are great opportunities to open up clean energy access and transition while addressing climate change, yet in 2021 just 8% of financing for energy transition technologies went to low- and middle- income countries – that’s the lowest share in 10 years”.
“We need to do better and act bolder, knowing we will only meet critical climate goals through collaboration and meaningful capital commitments.”
Harford said GEAPP’s partnership with ADB would see “additional capital mobilized at a ratio of at least 15-times at portfolio level to encourage the use of clean energy in the region, underpinned by practical innovation, scalable solutions, and knowledge sharing”.
