Asian Development Bank boosts climate financing target by $20bn

MANILA: The Asian Development Bank has raised its financing target for climate change adaptation and mitigation by $20 billion over the next decade, the Philippines-based lender said Wednesday.

The Bank, which provides loans and grants for projects in the poorest countries in the Asia-Pacific region, made the announcement ahead of the COP26 summit in Glasgow where it will discuss an idea to phase-out coal-fired power plants.

"The climate crisis is worsening daily, prompting many to call for increased climate finance," ADB president Masatsugu Asakawa said in a statement.

"We are taking action to meet this call by elevating our ambition to $100 billion in cumulative climate finance from our own resources by 2030."

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Under the 2019-2030 financing goal, which will include loans and grants, ADB will dedicate $66 billion to climate mitigation, including energy efficiency and low-carbon transport.

It will also commit $34 billion to adaptation activities to boost the resilience of countries to the impacts of a warming planet.

"The battle against climate change will be won or lost in Asia and the Pacific," Asakawa said.

It comes after an ADB review of its climate efforts in Asia found the lender "was not fully leveraging its potential" and needed to do more on adaptation where "results have been limited".

The ADB is studying the feasibility of buying coal-fired power plants in the Philippines and Indonesia and accelerating their retirement.

The so-called Energy Transition Mechanism, which would also involve funding from governments, the private sector and philanthropists, would replace the carbon-producing plants with renewable energy sources.

Further details are expected to be released at next month's climate talks.

Under a draft energy policy released by ADB in May but yet to be approved, the lender said it would stop financing new coal power plants.

Between 2009 and 2019 the ADB funnelled $42.5 billion into energy sector projects in Asia, where around 60 percent of electricity is generated by coal, its data show.