Keynote speech by Fatima Yasmin, ADB Vice-President for Sectors and Themes, at COP28: Catalyzing energy sector decarbonization: Lessons learned from piloting the Energy Transition Mechanism (ETM) in Asia and the Pacific, 5 December 2023, Dubai, United Arab Emirates

Good morning Excellencies, Ladies and Gentlemen. 

As the source of half of the world's greenhouse gas emissions, Asia and the Pacific Region is crucial for the fight against climate change.  Since 1966, the Asian Development Bank is committed to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific. To achieve that goal, the region must transition away from coal and fossil fuel-based energy and move towards renewables. 

In 2021, ADB launched the Energy Transition Mechanism or ETM in short, a program aimed at helping confront the issue of climate change by supporting this transition and reducing greenhouse gas emissions in Asia and the Pacific.

ETM is a public-private finance vehicle with two main goals: lowering emissions through early retirement of coal-fired power plants; and unlocking new investments for sustainable, and renewable energy. 

Fully integrated into ETM is a focus on just transition, to ensure that potential environmental and socioeconomic impacts of the energy transition are minimized. These are addressed by providing solutions to those who are affected directly and indirectly, including workers and communities.

The ETM is scalable and replicable, but each country needs a different ETM model. ADB is working extensively with all stakeholders from participating countries to set up and tailor country-specific ETM programs.

ADB's ETM pilot countries Indonesia, the Philippines, and Viet Nam are making significant progress. We are also working with Pakistan and Kazakhstan and considering other countries for transaction opportunities.

In 2022, ADB signed a Memorandum of Understanding with Indonesia’s Cirebon Electric Power, an independent power producer, and other partners to explore the early retirement of the first coal-fired power plant under the ETM program.

The planned transaction, which would retire a 660-megawatt coal power plant in Western Java, is earnestly moving forward. Just 2 days ago, on December 3, we announced a framework agreement with the key stakeholders on this transaction, aimed at achieving financial closure in the first half of 2024. Today, we will sign an agreement with the Ministry of Energy and Mineral Resources to collaborate on implementing ETM transactions for a just and affordable energy transition in the country.

In Kazakhstan, we have recently funded a study to examine the current domestic policy and regulatory environment to assess the feasibility of accelerating the retirement of coal-fired and combined heat-power plants.

We have completed a preliminary study in Pakistan last month, with inputs from key stakeholders, to explore the possibility of retiring coal power plants.

ADB is also preparing to submit a methodology to generate carbon credits from the early retirement of coal plants pursuant to Article 6.4 of the Paris Agreement. These high-integrity transition credits can help finance the coal transition by addressing financial gaps in refinancing coal retirement transactions and facilitating a just transition to cleaner energy.

ADB’s work on coal transition is made possible by the generous support of its member countries, including Japan, Germany, New Zealand, and Singapore as well as those countries supporting the Climate Investment Funds’ Accelerating Coal Transition program and the Global Energy Alliance for People and Planet. 

As the list of supporters and countries where the ETM program is actively growing every year, we are seeing the progress and momentum accelerate towards significant climate action. We also wish to thank the international development partners involved in the Just Energy Transition Partnership (or JETP) in Indonesia and Viet Nam, for which ETM is a critical delivery vehicle.

In a few moments from now, we will sign a Memorandum of Understanding with Global Energy Alliance for People and Planet and the Monetary Authority of Singapore to raise an up to two-billion-dollar energy transition acceleration finance partnership to advance energy transition in Asia, with an initial focus on Southeast Asia.

Excellencies, ladies, and gentlemen.
ETM is the perfect example of what is possible when public and private entities team up to tackle climate change. 

ADB is committed to climate action during COP28 and beyond. By 2024, we expect to see more progress on various ETM initiatives across Asia and the Pacific. 

ADB envisions a future where sustainable and resilient practices are the norm. We are committed to leading and supporting projects that have a positive and long-term impact on the global sustainable development goals.

We believe that together, we can create the change that is necessary to ensure a sustainable future for everyone. Thank you.