Opening Remarks by ADB President Takehiko Nakao at the Asia Clean Energy Forum 2017 on 6 June 2017 at ADB Headquarters, Manila Philippines
- ADB has invested over $60 billion in energy sector, almost 25% of its overall lending of $270 billion.
- 400 million people in Asia have no access to electricity; over 2 billion no clean energy for cooking.
- ADB's High-Level Technology Fund will integrate high technology and innovative solutions in projects.
Ladies and gentlemen, colleagues, and honored guests: Welcome to the Asia Clean Energy Forum 2017.
To begin, I would like to thank the co-organizers of this year’s Forum, the United States Agency for International Development represented by Mr. Jerry Bisson, and the Korea Energy Agency represented by President Nam-Hoon Kang, for their continuing partnership and close cooperation with ADB.
I would also like to acknowledge our keynote speakers for this opening plenary, Ms. Vivien Foster of the World Bank and Mr. Paul Simons of the International Energy Agency.
II. ADB’s contribution to clean energy
The theme of our 2017 Forum is “The Future Is Here: Achieving Universal Access and Climate Targets”. This theme is well aligned with ADB’s 50th anniversary.
Over the course of the last half century, ADB has seen the Asia and Pacific region transform from a region with high poverty, to a region of growth and innovation; a region that is responsible for a third of the world’s GDP and half of the world’s economic growth. Since its establishment in 1966, ADB has invested over $60 billion in the energy sector, almost 25% of our overall lending of $270 billion. ADB has helped countries meet their energy needs by combining its finance with knowledge.
"ADB and its member countries must pursue SDG7 on ensuring universal access to sustainable energy, SDG13 on addressing climate change, and the COP21 Paris Agreement."
But in developing Asia with a population of 3.7 billion, there are still 400 million people without access to electricity, and over 2 billion people without clean energy for cooking. Moreover, many Asian countries are facing severe air pollution problems and extreme events as a result of climate change. ADB and its member countries must pursue SDG7 on ensuring universal access to sustainable energy, SDG13 on addressing climate change, and the COP21 Paris Agreement.
In 2016, ADB invested a total of $4 billion in energy, of which $2.1 billion was for clean energy. These clean energy investments support solar, wind, hydro, renewable mini-grids, and energy efficiency projects for buildings and the industrial sector. Other ADB energy investments include distribution and transmission grids for traditional generation, gas fields (Azerbaijan), and gas pipelines and gas-fired power plants (Bangladesh).
III. Recent examples of combining finance and technology
Let me give you a few recent examples of ADB-supported projects in clean energy using innovative financing and advanced technology.
First, ADB approved last year a $5 million equity investment in an American venture company with advanced battery technology to provide long-duration battery storage solutions in Indonesia. The technology, protected by over 219 patents (76 pending) will be used in renewable energy-based micro-grids that require long duration discharge. The power will support households as well as telecom towers in remote areas.
The second example is about the first Climate Bond in Asia. In 2016, ADB provided credit enhancement, in the form of a guarantee of 75% of principal and interest, to a $225 million local currency bond issued by AP Renewables, a Philippine renewable energy company. The bond was for the Tiwi-MakBan geothermal energy facilities in Southern Luzon and certified by the Climate Bonds Initiative.
The third example is about mobilizing significant private sector resources. In late 2016, ADB approved a loan of $150 million to help Shaanxi Provincial Government in the People’s Republic of China establish a clean energy financing platform to channel funds to energy saving and emission reduction projects, through lending, credit guarantees, and leasing. It will also partner with commercial banks. The total investment mobilized by the platform is estimated to be in the range of $1.5 billion.
Fourth, ADB is introducing streamlined procedures for the 11 small Pacific island countries (with a total population of less than 1.5 million) to process small value renewable energy projects faster with lower transaction costs. Later this month, ADB’s Board of Directors will discuss a financing facility of $750 million to support a series of renewable energy projects in these countries.
IV. ADB’s new initiatives in supporting innovation and high-level technology
This year’s Forum focuses on Energy Efficiency, Renewable Energy, Energy Access, and the crossing cutting theme of innovation and planning for a future clean energy system. I would like to focus for a moment directly on innovation and high-level technology.
Innovation is already taking place more rapidly than many people expect. Renewable energy costs have been declining dramatically. Efficiency gains from insulating buildings are substantial. Lighter and stronger materials also reduce energy usage. High-level technologies can enable us to meet energy needs and climate change mitigation objectives in parallel.
ADB is increasing its efforts to develop and deploy more advanced technologies in the region – especially in the energy sector, including smart grids, mass energy storage, intelligent transport systems, smart cities, waste-to-energy technology, and remote sensing technology. ADB is also addressing growing interest in the durability and life cycle cost of infrastructure projects.
"ADB is increasing its efforts to develop and deploy more advanced technologies in the region – especially in the energy sector, including smart grids, mass energy storage, intelligent transport systems, smart cities, waste-to-energy technology, and remote sensing technology."
Many countries in Asia are moving toward middle-income status or above, and they have the capacity to absorb and develop high-level technologies. And many innovative companies across the world, including in emerging economies, are keen to support Asia’s dynamic transformation through their technologies. ADB has already initiated reforms in our business processes for project preparation and procurement to promote the greater use of advanced technologies.
To promote the integration of high-level technology and innovative solutions in project design and implementation, ADB is establishing a trust fund. ADB has already mobilized $40 million from Japan as the first contributor. This High-Level Technology Fund, which will be operational by July, will provide grants for feasibility studies, detailed designs, and pilot and demonstration activities. Pakistan has expressed interest in the area of large-scale battery storage to integrate solar and wind energy into its grid.
Ladies and gentlemen:
ADB pledges to continue to innovate and build upon the work we have accomplished thus far. ADB will continue to support knowledge sharing opportunities, such as this Forum. I hope that this week, clean energy experts from the private sector, academia, government, and international organizations will exchange experiences, learn from the latest developments, and share the common goal of Achieving Universal Access and Climate Targets.