The Asian Development Bank has committed to scale up investments in clean energy under a refocused policy that puts emphasis on renewable energy sources.
Haruhiko Kuroda, bank president, announced on June 18 that ADB will double available funding for clean energy projects to $2 billion annually, beginning 2013.
A day later, the bank's board officially adopted the new policy.
Kuroda expects the additional financing to help build low-carbon and energy-efficient economies throughout Asia and the Pacific.
He said that $2 billion is only a fraction of the region's financing needs (estimates run run as high as $7 trillion by 2030 for Asia/Pacific and $22 trillion worldwide), yet one that will hopefully catalyze additional resources from the private sector and carbon markets, among others.
Rajendra K. Pachauri, director of the Tata Energy Research Institute and former chairman of the Intergovernmental Panel on Climate Change, echoed Kuroda's statement.
"I hope this will usher changes that will not only help in creating the right climate for meaningful solutions in Copenhagen but also help new initiatives in this region that would lead to sustainable development," Pachauri said.
ADB's energy policy will basically focus on three things, explained Woochong Um, director of the bank's sustainable infrastructure division.
First, it will promote clean energy, including energy efficiency and renewable energy on both the supply and the demand side. It will also promote access to energy, especially for the rural and urban poor. Finally, it will continue to support reforms in the sector.
"Previously, we covered more or less the same thing, but [there was] not so much emphasis on the renewable energy component and access. It was sort of all over the place. Now it's more defined," he said.
Um noted that projects that could be supported with funding would be on wind power, solar power, small and large hydro, distribution efficiency, efficient forms of coal-based energy, and the promotion of public transport.
Philip Erquiaga, director general of ADB's private-sector operations, believes the energy policy will give way to numerous opportunities in the areas of small hydro, wind, biofuels, biomass, geothermal, clean technology, energy savings and efficiency, and greenhouse gas mitigation related projects.
The bank is also keen to involve the private sector in its development work. Um said ADB carries this out by creating bankable projects and providing guarantee mechanisms to reduce risks.
"So creating opportunity and space," he summed up.