- efficient system planning (case study Kazakhstan);
- trading of reserve capacities (case study Central Asia); and,
- benefits of the expansion of the regional power trade (case study of the Central Asian Power System).
The People’s Republic of China recently announced that they will achieve a peak in emissions before 2030 and carbon neutrality by 2060, while Fiji, Japan, the Republic of Korea, Marshall Islands, and Timor-Leste have joined the Carbon Neutrality Coalition. There is a call for action to maximize climate action through more vigorous policies and transformative measures to build back better and pursue green, inclusive, and resilient recovery in the post-COVID era.
There is a significant opportunity for countries to integrate low-carbon development in their COVID-19 rescue and recovery measures, and to incorporate these into updated nationally determined contributions (NDCs) and long-term low greenhouse gas (GHG) and climate-resilient development strategies (LTSs).
As more ambitious climate goals are pursued, ADB is ready to provide assistance in developing infrastructure such as clean energy, sustainable transport, reducing climate change vulnerabilities, promoting livable cities, and creating integrated solutions for the low carbon transition of its Developing Member Countries (DMCs) with a commitment of $80 billion in climate financing for Asia and the Pacific.
By supporting investments in innovative projects with high demonstration and replication value, and fostering private sector participation, ADB can support DMCs in reducing carbon intensity and formulating action plans for carbon emissions peaking and achieving sustainable growth.
Despite the availability of cost-competitive renewable energy and the rationale for massively scaling this up, multiple systemic challenges are obstructing progress:
- The Pacific developing member countries (DMCs) have limited borrowing and debt servicing capacity, forcing reliance on grant funding for capital intensive energy projects.
- The energy sector in the Pacific DMCs remains heavily controlled by state-owned utilities with inherent operational inefficiencies, chronic liquidity deficits, and limited capital resources for renewable energy and energy efficiency projects.
- Existing grant funding has not leveraged private sector participation in renewable energy development.
- High upfront capital costs and institutional inertia limit competition and private capital mobilization.
This region has a unique opportunity to come together to solve these issues, and in doing so, make significant progress in helping those least responsible and most vulnerable.
Along with increasing understanding of the scale and nature of the challenges, the session focused on the major bottlenecks and drive action to address them. The session provided the groundwork and imperative for the global community to work together to enable the design of transformative approaches and define a new generation of systems and business models for the new normal in the Pacific region.
In the past decade, the green bond (or more generally the concept of green financing) market has emerged and grown. It gave the investors the opportunity to align their pursuit for financial returns with their pursuit for environmental benefit by ascertaining that the investment proceeds get channeled through to green assets – e.g. clean energy assets. However, there are other equally important development issues that need to be addressed – sustainable development goals (SDGs) - which many countries have committed to prioritize and achieve by 2030. Experts estimate that roughly $5 – 7 trillion financing is needed to develop sustainable infrastructure. The ability to catalyze financing for these investments will be key to achieve these ambitious sustainable development agendas.
Governments, private institutions, and individual investors have increasingly become more conscious of environmental, social, and governance issues that hinder economic transformation and sustainable growth. With recent developments in international policies creating awareness for and guidance in the development and design of infrastructure aimed at achieving SDGs, capital markets will inevitably want to move one step further to support projects that aim to achieve positive environmental and social impacts.
The objective is to explore new thematic financing in clean energy sector. As we started to see new thematic bonds/financings, beyond green, that aim to address various social themes (e.g. blue bond), the workshop explores what thematic financing concept (e.g. gender, governance, etc) could be effective in clean energy space, and how it can be implemented. This would provide the investors to pursue ‘financial return + green + X’. Subject experts were invited to provide insights for ADB and ACEF participants through a panel discussion.
Some of the identified and currently implemented measures across the region include:
- Large scale roll-out of Advanced Metering Infrastructure and focus on implementation of smart infrastructure;
- Schemes and programs for enabling financial and operation turnaround of utilities;
- Liberalization of electricity retail markets and mechanisms for increasing private sector participation in electricity distribution; and
- Programs and incentives for accelerating implementation of DERs and grid-connected RE.
While few of the utilities across the region have advanced in their grid modernization maturity curve, most are still in the early stages of their transition towards a clean and smart energy future and are seeking viable and innovative solutions to accelerate on this path. Therefore, in this context, planning and implementation experiences from different parts of the world (both developed and developing countries) could provide a great learning opportunity for utilities across the region to develop and implement new, holistic approaches to manage the electrical grid of the future and deliver cleaner, reliable, quality an affordable electricity for all.
ADB has also been financing, along with other development partners, various projects and programs in the region and it is important to look at the experiences of these initiatives and build on that while preparing future support to the DMCs. For this, partnership with the governments, electricity regulators, utilities, technology providers, private sector, research organizations, development partners, among others, is even more critical than before.
An increasing number of governments and businesses are announcing that they are ‘going green'. This gives us optimism that the growing preference for energy efficiency and renewable energy will help accelerate the region's clean energy transition. As ACEF 2021 focuses on the challenges and pathways to fast-track the low-carbon transition in the region, this years’ event also served as an important platform for dialogue leading up to this year's COP26 summit on uniting the world to tackle climate change. ADB’s Southeast Asia Energy Department (SEEN) is holding a virtual workshop to highlight key areas of energy sector development in the region by hosting development partners to share their key activities and discuss opportunities to partner with developing member countries to accelerate the clean energy transition.
A group of development partners with active programs in the Southeast Asia region introduced their respective programs. Speakers highlighted the support available to assist developing member countries in their journey to clean energy and join in an interactive discussion with attendees on the opportunities, challenges, and gaps for such support.