Climate Finance and the Path to Recovery: Supporting Clean Energy in Asia and the Pacific amid the Challenges of COVID-19 - Masatsugu Asakawa
Speech | 16 June 2020
Opening remarks by Masatsugu Asakawa, President, Asian Development Bank at the Asia Clean Energy Forum 2020, 16 June 2020
Ladies and gentlemen, greetings.
It has been a challenging few months for us due to the COVID-19 pandemic. Tackling climate change and other development issues has become more difficult. However, the situation also offers opportunities: to reopen economies in new ways and to rebuild smartly. We gather together at this Asia Clean Energy Forum, or ACEF 2020, to discuss these opportunities.
On behalf of the Asian Development Bank (ADB) and our co-organizers, the United States Agency for International Development (USAID) and the Korea Energy Agency, welcome. I am very pleased that over 4000 participants will join us online as ACEF celebrates its 15th year connecting policymakers and practitioners on the important subject of clean energy.
In particular, I would like to thank Dr. Fatih Birol, Executive Director of International Energy Agency (IEA), for his upcoming keynote speech on global trends in the clean energy transition; and IEA for being a strong knowledge partner of ADB over the years.
Let me share with you some of my ideas about the indispensable role of clean energy in enabling Asia and the Pacific to emerge from the COVID-19 pandemic stronger than before; and how your discussions can contribute impactful solutions at this crucial moment.
II. ADB’s support for climate finance amid the challenges of COVID-19
As we all know, the ongoing COVID-19 pandemic has caused severe and potentially long-lasting effects on health, livelihoods, and economies. ADB projects that global losses could reach $8.8 trillion, with Asia and the Pacific accounting for up to 30% of the overall decline.
ADB’s response has been quick and decisive, as we put together a massive $20 billion comprehensive package to help our developing member countries address strained government budgets, obtain medical supplies and equipment, and protect poor and vulnerable groups. We are also supporting energy companies by providing working capital and helping to sustain supply chains.
In addition to our COVID-19 response, we continue to invest meaningfully in the energy sector. We plan $5 billion in energy investments for 2020 and have already approved, in just these first five months, about $900 million in loans supporting renewable energy, efficiency, and electricity networks.
Our continued investments in clean energy during this challenging period is a part of ADB’s longstanding commitment to lead the region in combatting climate change and achieving the Sustainable Development Goals.
In just over a decade from 2008-2019, ADB invested over $23 billion in clean energy—about 65% for renewable energy and 35% for energy efficiency. We also mobilized cofinancing from our development partners to provide an additional $15 billion. These commitments contributed to scale and pace of investments in Asia and the Pacific, which in 2019 installed 119 gigawatts of renewable power generation capacity, representing 44% of the world total. Our region’s share of solar energy is an impressive 57%.
In 2019, our climate financing reached a record high of $6.56 billion—meeting our target of doubling ADB’s annual climate investments from 2014, a year ahead of schedule. We have set even higher climate targets for the next ten years under our Strategy 2030. We aim to provide $80 billion in cumulative climate financing and to focus on climate adaptation and mitigation efforts in at least 75% of our operations.
III. The need to maintain strong action to tackle climate change
Let me emphasize that the urgency to address climate change by accelerating the clean energy transition has not diminished because of the pandemic. In fact, the task is more important than ever. Like COVID-19, climate change poses a dire threat to human lives, and highlights the need for early preparation and crisis response systems.
200 million people remain without access to electricity in Asia and the Pacific, and 1.8 billion do not have access to clean cooking. The signs of climate change remain, and are alarming: rising sea levels, melting ice, and extreme weather. Over half of the world’s CO2 emissions come from our region.
Our Strategy 2030 serves as a roadmap for addressing these pressing issues while building a dependable and high-quality power supply, particularly in rural agricultural communities, which is vital for people’s livelihoods. Our projects supporting wind power in Thailand, geothermal electricity generation in Indonesia, clean energy storage in Mongolia, and rural high voltage distribution in India are just a few notable examples.
Our region’s transition to clean energy also requires active participation and partnership from the private sector. We are helping to leverage long-term commercial financing so that renewable energy can become an attractive and reliable piece of the energy landscape. Our private sector investments continue to grow, representing one-third of ADB’s energy sector climate financing in 2019; and we will soon launch a new platform called ADB Ventures, to invest in clean technology startups and fill the risk capital gap, particularly in smaller and frontier markets.
IV. Future directions for energy in Asia and the Pacific
Let me turn now to discuss how our region can recover from the COVID-19 pandemic while promoting clean energy. Here, Let me emphasize that measures to revive economic growth have to be planned and implemented without undermining long-term sustainable development goals such as the Paris Agreement targets.
Shortly after I took office as President of ADB in January—and just before the COVID-19 outbreaks cascaded across the world—I said that protecting the environment and tackling climate change are fully compatible with economic growth. Faced now with the damaging effects of the pandemic, I believe with the same conviction that this is also true for economic recovery.
Increased investments in clean energy infrastructure should be an important part of post-pandemic stimulus packages for our developing members—ensuring that economies emerge not only stronger and more resilient to climate and health shocks, but also with jobs in a renewable energy industry that offers more and higher quality employment opportunities than conventional energy.
To strengthen and speed our path toward a clean energy future, we will also encourage technology innovations—such as floating solar, waste-to-energy, electric vehicles, hydrogen, battery storage, and smart grids. We launched the first ADB Innovation Challenge at ACEF last year and will support pilot projects selected from among the 100 excellent proposals. This year, our challenge is to develop digital and other solutions for handling waste and reusing discarded materials.
ACEF 2020 will focus on cross-sectoral innovations and energy sector resilience—key elements for achieving nationally determined contributions and implementing our Strategy 2030—particularly in light of COVID-19. We are also reviewing ADB’s Energy Policy 2009 so that our support for universal energy access and the low carbon transition remains relevant and effective. We will hold consultations with stakeholders at these meetings.
Thank you, once again, for joining us at ACEF 2020. I look forward to learning about how your discussions have deepened our collective understanding of the important work that needs to be done on clean energy at this critical juncture in our lives and those of future generations.
I wish you productive discussions, and I remain ever humbled by your efforts to help achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific.