Cusi: Withdraw coal financing gradually

May 20, 2021 02:30 AM By Chito Lozada
https://tribune.net.ph/index.php/2021/05/20/cusi-withdraw-coal-financing-gradually/

The Asian Development Bank (ADB) should review a policy in which it aims to halt financing for new coal power plants and must consider a gradual phaseout to prevent disruptions in the growth momentum of poor countries.

Department of Energy Secretary Alfonso Cusi told Daily Tribune that such a policy may constitute a “backward push” among developing economies including the Philippines.

“The Philippines need energy (upstream and downstream oil, gas and coal and electric power industry development) to attain its social and economic aspirations,” according to Cusi.
The ADB released a draft policy statement last week saying it will stop financing new coal power plants.

The ADB, which provides loans and grants for projects in the poorest countries in the Asia Pacific region, said its current policy was “no longer adequately aligned with the global consensus on climate change.”

“Coal and other fossil fuels have played a large part in ensuring access to energy for the region’s economic development, but they have not solved the energy access challenge, and their use harms the environment and accelerates climate change,” the Manila-based bank said in the document.

Target inefficient plants

Cusi, noetheless, noted the ADB’s energy transition policy should be one in which it will allow the replacement of “inefficient, uneconomical, uncompetitive energy sources on a fuel and technology neutral basis.”

Withdrawing financing on oil, gas and coal sectors serving both power and non-power industries without due regard to efficiency, economy and competitiveness as well as the required scheduling of replacements and technical and financial support for the phase out period will be a backward push, he noted.

He added that this will hinder the Philippine’s aspiration to join the ranks of the upper middle-income countries.

Ecological blacklist

The lender said it will also no longer fund “any coal mining, oil and natural gas field exploration, drilling or extraction activities.”

However, under certain conditions, it would provide funds for natural gas projects and “hybrid electricity solutions” involving fossil fuels as backup systems, according to the draft.

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.
The final version of the energy policy is expected to be submitted to the ADB board of directors by October.

US climate Ambassador John Kerry called on the ADB to adopt a “more restrictive fossil fuel financing policy,” warning that island nations faced a situation “beyond existential” due to climate change.

Speaking at a seminar during the ADB’s annual meeting, Kerry called for an end to fossil fuel subsidies and coal plant financing.

He warned the 20 countries responsible for most of the world’s emissions were not “moving in the same direction” or fast enough to tackle warming.