The ADB’s last energy policy was released in 2021, with a mandate for a midterm assessment this year.
The Manila-based lender announced to nonprofits in a consultation in June that the updated energy policy was going to be finalised within the last quarter of the year, with the board’s approval due by the first quarter of 2026.
The bank had acknowledged that it would be a “lengthy deliberation”, said Nazareth del Pilar, just transitions advocacy officer of NGO Forum ADB, a regional network that campaigns for accountability at ADB.
But in a virtual briefing with the multilateral in July, del Pilar said ADB cut short the timeline for the final draft to be updated within the third quarter of this year, then extended it to 3 October. The reason given for the earlier deadlline was that the bank was avoiding “the busy board schedule in 2026”, she said.
The board would then be able to approve the updated policy within the fourth quarter of this year, as stated on the multilateral’s website.
The review process is now in Phase 3, where the final draft of the updated policy has been scheduled within the third quarter of the year. But the NGO Forum on ADB says this deadline has been extended to 3 October. Despite the minimal extension, nonprofits still consider the review process to be “rushed”. Image: ADB
The shortened review period is a “deeply inadequate timeframe for a policy that will shape the bank’s energy investments and climate strategy for the next decade,” said NGO Forum ADB, whose members include Philippine Movement for Climate Justice, Freedom from Debt Coalition, Legal Rights and Natural Resources Center, and Asian Peoples’ Movement on Debt and Development.
Although the ADB argued that it met with CSOs “several times this year” to consult on the amendments to the policy, del Pilar said the meetings “lacked deeper discussions, especially in the critical areas they proposed.”
Documents containing the proposed policy amendments were only shared with CSOs halfway through the year, giving stakeholders limited time to review and respond, she added. She also noted that a public announcement about the review process was lacking, leaving affected communities in the dark as to whether the document was open for their comments.
But ADB said it had set up a webpage inviting CSOs to participate in the consultation process and opened an eight-week window to receive written comments.
The development bank’s additions to the current policy include investment in critical minerals and clean technology manufacturing, as well as methane reduction efforts.
Its proposed changes also involve restricting oil trade finance, based on the board decision taken in July last year, where the bank announced that it will support limited downstream oil projects such as the distribution of diesel and natural gas, but will not support upstream or midstream oil exploration and production projects.
It is set to add policies on tackling methane leakages and routine gas flaring, expanding support for early decommissioning of expensive oil-fired power and heating plants, co-firing with clean fuels in fossil fuel-powered facilities and heating plants to reduce emissions.
The revised energy policy is to also avoid investing in carbon capture and storage if used for enhanced gas recovery.
“All these actions further strengthen ADB’s resolve to support increasing energy access and energy security and improving affordability while supporting the energy transition and reducing greenhouse gas emissions in our developing member countries,” Priyantha Wijayatunga, senior director of Energy for ADB, told Eco-Business.
‘Green extractivism’?
NGO Forum ADB questioned ADB’s proposals for provisions in critical minerals in the new energy policy draft. The bank has yet to finalise guidelines under its new critical minerals-to-manufacturing value chains approach, which aims to ensure sustainable mining from extraction to manufacturing.
ADB already approved its first critical minerals project in copper and lithium-rich Pakistan, along with other international financial institutions in August, based only on a board directional paper. The paper does not give guidance for how they would invest in critical minerals to generate clean energy and what technology they would use to support the project, explained del Pilar.
A copper-gold mining site in Balochistan, Pakistan. Image: Faiqah A Jabbar, CC BY-SA 4.0, via Wikimedia Commons
The ADB-led plan in the Reko Diq copper-gold mine in Balochistan is the first mining scheme supported by the bank under its new approach, designed to help Asia and the Pacific capitalise on rising demand for materials essential to clean energy. Pakistan, which has a mineral wealth estimated at US$6 trillion, is being eyed by developed countries like the United States for trade and investments in its critical minerals sector.
Siting the project in Balochistan, a known conflict area, makes it highly unlikely that the banks financing the plan can uphold their own environmental, social, and human rights safeguards, del Pilar said. She added that proceeding with the scheme would contradict ADB’s stated commitments to sustainability, responsible business, and climate action.
“If these are the types of critical mineral investments ADB chooses to support, it only shows that the bank is engaging in greenwashing: promoting clean energy through ‘green extractivism’ while repeating past mistakes in its dealings with the mining sector,” she said.
ADB’s provisions for critical mining and clean energy technology reflect how the “unprecedented global demand for clean energy and digital technologies is rapidly increasing the need for critical minerals and clean energy technology manufacturing,” said ADB’s Wijayatunga.
The Asia Pacific region is poised to grow its economy by US$47 trillion by 2070, but requires a massive scale-up of emerging technologies and build-out of new industries such as critical minerals. Demand for lithium, nickel, cobalt and rare earths is surging, with the electric vehicle fleet in the region projected to reach 671 million vehicles by 2050.
“This will create opportunities to attract foreign direct investment, create quality jobs, and promote inclusive and resilient growth for our developing member countries, while accelerating the global clean energy transition,” said Wijayatunga.
“All proposals considered by ADB will be subject to rigorous risk and impact assessments and ensure meaningful consultation with civil society and Indigenous peoples’ organisations,” he added.
