ADB, Clean Energy and the Carbon Market: A Fact Sheet

MANILA, PHILIPPINES - ADB is actively engaged in promoting environmental sustainability at local and regional levels, including the effective development and promotion of clean energy technologies, and the establishment of an effective carbon market over the long term. It also seeks to integrate climate change adaptation in development and natural resource management decision-making.

As a development financing institution, ADB receives contribution from various donor governments who support the dissemination of renewable energy, energy efficiency, and climate change mitigation activities. ADB is also one of the executing agencies for the Global Environment Facility.

Over the past decade, ADB has provided significant funding in energy-environment related areas such as energy efficiency, renewable energy, methane capture, fuel switching, and clean coal technologies. Drawing on internal and external expertise, it intends to mainstream the vision of clean development and the climate, and expand ADB's services to play an even greater role in promoting sustainable growth in Asia and the Pacific.

Some of ADB programs related to clean energy and the carbon market are highlighted below.

The Renewable Energy, Energy Efficiency and Climate Change (REACH) Program: Established in 2002, The REACH Program is funded by the governments of Canada, Denmark, Finland, and the Netherlands. It supports the application of renewable energy, energy efficiency, and greenhouse gas abatement technologies in ADB's developing member countries. REACH has already successfully carried out work in capacity building, project identification, and project due-diligence across 18 countries. See the REACH website.

Energy Efficiency Initiative: ADB recognizes that energy efficiency has considerable technical and economic potential, on a scale that can contribute substantially to meeting future demand for energy services. Energy efficiency improvements can slow or reduce the increase of greenhouse gas emissions without sacrificing economic growth or the standard of living. The initiative therefore will boost investments and activities in energy efficiency - both from the supply and energy use sides - and also include renewable energy. And it will define a cohesive way forward for supporting investment programs. ADB is presently holding consultations and plans to launch this initiative in mid-2006.

Clean Development Mechanism Facility: ADB is active in utilizing the carbon market to bring additional financial value to projects. Established in 2003, the CDM Facility at ADB provides opportunities to its development member countries to access additional financial resources through efficient emissions reduction to promote sustainable development. Recently, it successfully facilitated the financing and carbon credit transaction of the Fuxin Coalmine Methane Project in the People's Republic of China - a project that is improving mine safety, generating clean fuel supplies, and significantly reducing greenhouse gas emissions. More than 100% of the project's capital costs will be recovered from the sales of carbon credits. See the CDM Facility web site and news release.

Carbon Market Special Initiative: ADB is looking into establishing a dedicated carbon cofinancing facility. This would further capitalize on the growing carbon market and serve better ADB's member countries' need for sustainable energy. This facility, unlike other emission credit procurement vehicles currently available, would provide up-front funds to project sponsors. Through this, projects could incorporate more efficient and cleaner technologies. ADB is consulting with member countries with a view to launching the facility later this year. See news release.

Appointment of Special Advisor: With a view to enhancing its clean energy initiative, ADB has recently appointed Bindu Lohani, Director General of ADB's Regional and Sustainable Development Department as Special Advisor to the President on Clean Energy and Environment. See news release.