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PREAMBLE The Forum network thinks that this newly approved AIIB ESF, in general, has some improvements from the draft released in September 2020 but still has limitations in prioritizing real protections for project-affected communities, whose rights should be at the center of project design, operation, and implementation. The network calls out the material weaknesses in provisions of this ESF and urges the bank to exercise due diligence on community and environmental protection in its implementation of this framework. The Forum will highlight some of the problematic sections in the critique below to help guide AIIB towards a more responsible and binding ESF that holds clients accountable to both environment and communities. CRITICAL ANALYSIS OF THE NEWLY APPROVED AIIB ESF COMMENTS ON THE INTRODUCTION According to a database published and maintained by German civil society organization, Urgewald, the AIIB has failed to meet its own ESF standards in its first five years of operation. The new ESF must uphold the highest level of protection for the environment and communities as its core objective. [1] To provide the highest protection for communities, the international human rights framework must be adopted by the AIIB as an overarching framework for the ESF and its implementation should be reconciled with international norms and best practices. AIIB needs to respect human rights and operationalize the international obligations of its member states to protect human rights. AIIB should also adopt a zero-no tolerance policy for threats and retaliation against affected communities, persons, and human rights defenders. On ESF review and update, section 7.0 the AIIB indicates that ‘updates may be introduced to the framework’. How this update process will be undertaken is not articulated further in Section 7.0 and implies a ‘closed-door’ management-led process. This is problematic as issues such as client compliance measures, information disclosure timelines, categorization, and ESEL lists have tremendous significance on people's lives and environments. Updates without a full public consultation on proposed changes to the ESF threatens local communities directly. The AIIB continues to remain uncommitted to an inclusive and transparent review of the ESF and does not align its policy review to meaningful consultations with civil society and local communities. This is reflected in its adoption of interpretative language and terminologies which are not legally binding. A LAGGARD VISION STATEMENT The new AIIB ESF in the Vision section has removed the critical piece of the Project Affected Peoples Mechanism in its entirety from its Vision statement. This lack of recognition in the Vision of the ESF undermines the role of the PPM and the critical importance of restitution from harm to communities from AIIB Operations. This is a glaring omission in the AIIB ESF Vision. While the Bank continues to market itself as a ‘lean and green’ bank, this aspirational statement is not reflected in its Vision statement nor the ESF policy. Committing to a 2-degree margin of climate change rather than aiming to limit heating to 1.5C in line with IPCC Pathway 1 is unacceptable. The UN Secretary-General has stressed the ‘irrefutable evidence of human evidence’ and the United Nations High Commissioner for Refugees (UNHCR) released data showing that the number of people involuntarily displaced by climate change-related disasters since 2010 has risen to 21.5 million.[2] By choosing to adopt the unambitious threshold of 2 degrees Celsius, the AIIB has not shown a proactive approach or interest in safeguarding the lives and livelihood of climate-vulnerable people. This is also in contradiction with the commitment made by the AIIB along with other multilateral development banks to finance and support countries in achieving the Sustainable Development Goals by 2030. [3] ASPIRATIONAL CLAIMS ON GENDER The Forum is pleased to see the better language on Gender and Gender Equality, and specifically the noteworthy focus on Gender-based violence (GBV) and sexual exploitation and abuse (SEA) in Section 19. Yet, in isolation Section 19 remains an aspirational claim which is not underscored by an operational plan or a good practice note. Gender-based violence (GBV) and sexual exploitation and abuse (SEA) continue to threaten 1 in 3 women [4]. This risk is exacerbated by the labour influx driven by the construction, maintenance, and upgrading of large infrastructure projects in transport, energy, water and sanitation, irrigation and urban infrastructure,3, etc, all of which are projects financed by the AIIB. The AIIB lacks both a gender policy and the expertise needed to operationalize the vision statement outlined in Section 19 on gender equality. An analysis of 24 projects conducted by Gender Action on projects financed or co-financed by AIIB found that 87.5 percent of project documents have weak to moderate gender language and 75 percent of projects lack consideration and appropriate risk management on the susceptibility of women and girls to GBV in infrastructure projects.[5] This is a worrying trend, especially when the private and financial intermediary portfolio of the AIIB with its inadequate disclosure of the information is taken into account. This form of ornamentalising[6] issues with no clear policy direction or operational manual is problematic because it leaves interpretative loopholes which are likely to be violated. While gender makes an appearance in the ESF policy 52 times, it is still not clear how the Bank intends to pay ‘special attention’ (p.17), identify ‘adverse gender-specific risk’ (p.55) and ‘manage risks of Project-related GBV’ (p.55) especially in the absence of the aforementioned and indispensable Gender Policy. We implore The AIIB to ensure binding gender safeguards underpinned by international human rights declarations and texts including, the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), the Vienna Declaration and Programme of Action, the Programme of Action of the International Conference on Population and Development, the Beijing Declaration and Platform for Action, the Durban Declaration and Programme of Action, the Addis Ababa Financing for Development Conference. In the absence of a Gender Policy, the AIIB should aim to develop a Good Practice Note on Addressing Gender-Based Violence in Infrastructure investment which outlines the approach and requirements for Borrowers (Country and Corporate) on identifying risks of GBV and in particular Sexual Exploitation and Abuse (SEA) and Sexual Harassment (SH). This should underscore the application of the ESF policy. MORE CAN BE DONE ON PROTECTING AND EMPOWERING PERSONS WITH DISABILITIES (PWDS) [7] The draft ESF must have clear and stringent safeguard provisions for PWDs against all forms of discrimination and barriers related to AIIB Operations; in accordance with the United Nations Commission on Human Rights and the United Nations Convention on the Rights of Persons with Disabilities. Further, the protection of PWDs’ access to customary rights and land ownership should be clearly stated in the document. AIIB should also promote the employment of qualified persons with disabilities. The Bank should take affirmative action to ensure that there will be qualified persons with disabilities employed in the Operation. WHAT OF THE INTERNATIONAL CORE LABOR STANDARDS FOR LABOR? Section to 21 mentions the treatment of labor and articulates some key features on issues such as wage, non-discrimination, the abolition of forced and child labor. Yet the ESF does not underpin the ILO Core Labor Standards(CLS) as the highest standard for labor safeguards. Further down the document, the lack of CLS persists in the ESFand, therefore, must be included. CRITIQUE OF THE ENVIRONMENTAL AND SOCIAL POLICY ESP Within the context of Section 3.0 Approach for Environmental and Social Management, we note the positive inclusion of 3.10 language on the evaluation of the performance of safeguards in projects. WEAKNESS IN THE SCOPE OF APPLICATION Section 10.0 on co-financiers policies the ESP fails to introduce binding requirements, where AIIB must perform equivalency assessments. Consequently, the language is not clear on the implementation of the highest standards among the co-financiers. The arbitrary selection of lead financiers systems or that which is ‘materially consistent’ with ESF is still not abolished from this ESP and the overall ESF. This remains a glaring gap in the policy and will potentially threaten local communities and ecosystems on all co-financed AIIB operations. ESF Exemptions ON ESG APPROACHES This ESF formalizes the derogation for capital market projects from applying the ESP under Section 12 of the ESP. Instead, these projects will adopt the ESG Frameworks of the Client. In most cases, widely-adopted ESG frameworks make no reference to information disclosure and provide limited detail on how potential portfolio investments will be assessed. By operating outside of public oversight and scrutiny, ESG agencies have given the green light to damaging projects, according to analyses done by Inclusive Development International.[8] This level of opaqueness means that people can be negatively affected by these investments with no ability to raise grievances or know where the financing is coming from. The ESF also states explicitly that the Project Affected Peoples Mechanism will not apply to AIIB capital market investments. The ESG Frameworks adopted by existing projects contain no grievance mechanism, leaving affected people with no path to recourse if they are negatively impacted. ON RESULT-BASED FINANCING (RBF) AND CO-FINANCING The same exemptions apply to Result Based Financing (RBF) which introduces the option for the Bank to “adopt its own self-contained policy framework to govern these operations” (Section 31). The apparent loophole in the ESF was not elaborated on or further defined beyond section 31. Questions remain on what ‘self-contained policy’ means for RBF and what it entails in terms of mitigating and preventing harm to communities and the environment. Further inclusions of policies about RBF should have been clearly included in the ESFP with adequate public consultation measures for feedback and review. SECTION IV. ROLES AND RESPONSIBILITIES Section 15.1 (d) discloses environmental and social documentation for the Project in a timely manner. Forum is deeply concerned about the vague use of interpretative terminologies such as ‘timely’ on disclosure of project information, especially environmental and social documentation as this leaves room for contravention and systematic failures. Instead, the Forum recommends the use of a strong time-bound manner substantiated by a number of days, for example, 30 days before project commencement. In its project monitoring, the Forum noted that the environmental and social documentation were not released and publicized for Bhola IPP and Beijing Gas before project construction leading to direct harm to communities and the environment. At present, these are the two of the only standalone projects financed by AIIB which if continued posits further degradation to human rights and the environment experienced by communities. On the issue of non-compliance, we suggest the use of the word ‘will’ instead of ‘may’ in the language- ‘the Bank will exercise its available contractual remedies under the Legal Agreements governing the Project.’ Unfortunately, this has not been taken on board in this ESP, and the gap remains. SECTION V. ENVIRONMENTAL AND SOCIAL SCREENING, CATEGORIZATION AND DUE DILIGENCE BY THE BANK Section 17.2 articulates that ‘As an element of the categorization process, the Bank may conduct a field-based review of the Project to provide….”. In the ESF, this is one of the first mentions of field-based reviews, and the language allows flexibility on doing field-based reviews as part of categorization using the word ‘may’. There is no substitute for field-based reviews in assessing environmental and social risk as project sites are mostly in remote areas and directly affect communities and ecological systems. We strongly urge replacing the word ‘may’ with ‘must’ when it comes to the Bank conducting field-based reviews as part of its environmental and social due diligence. Unfortunately, the recommendation was not taken on board, and therefore there is no binding requirement for AIIB to do field-based reviews on ESP issues. CATEGORY A For Cat A in Section 18.1 (b), the requirements articulated are ESIA, ESMP, and ESMPF. We demanded the caveat ‘or other similar Bank-approved documentation’ must be removed from the draft ESF as replacing a comprehensive ESMPF with arbitrarily Bank-endorsed documentation undermines the severity of Cat A risk. This recommendation has NOT been taken into Cat A language in this ESF. This is a clear dilution to Cat A risk assessments and binding requirements. In the same Section, we had recommended that the bank must introduce language that explicitly ensures that affected communities will be restored to pre-project levels if not better as per ESIA and ESP application. Furthermore, we recommended that CAT A must remove the provision of ‘offsets’ when it comes to projects with high risk. Neither of the critical recommendations from civil society for CAT A was adopted in this new ESP. CATEGORY B Section 18.2 point (b) allows loose interpretation of risk through the language ‘The Bank may determine that an environmental and social assessment or another similar instrument is appropriate for the project’. We urged that this sentence be removed from this section entirely. For Category B projects a strict procedural Initial Environmental Examination IEE must be made mandatory to assess the environmental and social risk. On many occasions, Cat B does not anticipate seasonal variations in local livelihoods, migratory shifts in flora and fauna which lead to unanticipated harms due to lack of proper environmental and social assessment. To be proactive in safeguarding all projects deemed Category B, the Bank must mandate IEEs without exception (NOT cases by case basis). The Bank must also ensure that seasonal and environmental variations that affect communities and the environment are factored into the IEE methodology. Furthermore, CAT B must remove the provision of ‘offsets’ when it comes to projects with medium risk. All mitigation and preventive measures must be ensured at the project site. The above recommendations from NGO Forum on ADB for CAT B had NOT been incorporated into this new ESP. CATEGORY FI We recommended that all Category FI projects identified in section 18.4 must ensure that the FIs identified have ESMS which are assessed in equivalency to the ESP. Furthermore, the ESF must include language which identifies high-risk CAT A sub-projects amalgamated under the CAT FIs and ensure the risk assessment follows Cat A risk assessments and policies as recommended above. This recommendation was also NOT taken into this policy. It needs to be noted that in the Draft ESF Section 5.10.1 the Bank allowed too much flexibility to FI clients by allowing future lending approval based on FI ESMS track record. This section 5.10.1 was a dangerous loophole in the draft ESF which allowed FIs to do future subprojects anywhere in the world without any form of environmental and social assessments on environmental and social impacts. The NGO Forum on ADB recognizes this problematic provision has been rightfully removed from the approved AIIB ESF. ON REVIEW OF INFORMATION The Forum strongly suggests that the Bank has to assess all risk assessment documentation as per the given category of a project- CAT A: ESIA, ESMP, ESMPF, LARP, LARPF, IPP, IPPF CATB: IEE, lARP, LARPF, IPP, IPPF CAT FI: ESMS equivalency assessment to ESP, Subproject CAT A: ESIA, ESMP, ESMPF, LARP, LARPF We recommended – “The NGO Forum on ADB urges AIIB to pay heed to the above assessments per category and urges the bank to leave no room for exceptions. The Bank must be diligent in assessing all risk related information regardless of category status before project approval to ensure that communities and environment are ensured safeguarding from any AIIB investment. The due diligence of risk assessment should also go through multiple checks by key AIIB officials at different levels of AIIB management safeguard machinery to ensure that risks have been assessed in compliance with the ESP and the highest standards of safeguards are met.” Some recognition of the above recommendations have been reflected in sections 24.2- 24.4 yet we have to see how this is implemented on a project-by-project basis. The Forum also recognizes the improvement in information requirements on Clients by AIIB in sections 25.1 and 25.2. MANAGEMENT ENGAGEMENT ON CONCERNS RAISED The new AIIB ESF provides little guidance to Management on how to meaningfully engage with project-affected people who have raised concerns. Project-affected people will be reluctant to raise concerns with Management unless they trust in the safety of the process and believe there will be a meaningful response. The ESF should provide a process for responding to concerns in a safe and meaningful way. At a minimum, the ESF should have established a timeline for Management’s response, to ensure predictability for project-affected people. It should also have provided for disclosure of concerns raised while respecting any confidentiality sought by project-affected people, and actions taken by Management in response. SECTION VI ENVIRONMENTAL AND SOCIAL ASSESSMENT BY THE CLIENT Section 28 still allows the flexibility for Clients to avoid or bypass integrated environmental and social assessment. Once again we see the AIIB ESF favoring the Client and putting more risk on the environment and the communities. This section should have held the highest standard for Clients (both public and private) in ensuring integrated environmental and social risk assessments without any form of exception. It's important to note the Client delivers the ESP on the ground, therefore the integration of risk assessments must be done by the client, not the bank. The NGO Forum on ADB recognizes that AIIB has NOT retained our previous submission on binding integrated environmental and social assessment. SECTION 29.1 TO 29.3 SHOULD ALSO STRICTLY APPLY TO CATEGORY B PROJECTS We strongly urge that Section 29.1 to 29.3 applied to Cat FI subprojects in implementation For all Category A, B, and FI subprojects the Bank and Client must ensure that Land Acquisition and Resettlement Plans (LARP) and Land Acquisition Resettlement Frameworks as well as Indigenous Peoples Plans (IPP) are shared with the communities for public comment with adequate time before project approval. The LARP, LARPF, and IPP, IPPFs should also be translated into local languages and explained to local communities through meaningful consultations using culturally and socially appropriate methods to ensure that risks and plans have been clearly understood. In application of the articles 29.1-29.3 the AIIB must ensure there are no exceptions to the ESP application on Associated Facilities. The Forum recognizes the provisions on Associated Facilities from section 34.1 -34.2 a) and b) as welcome additions and hopes that policy implementation will ensure the strictest compliance to the AIIB ESF and ESP by clients on this. The Forum also recognizes and commends the addition of Section 32 and all articles in the subsection ‘Addressing Land Acquisition and Involuntary Resettlement. In practice, AIIB Operations in the Bhola IPP project had demonstrated the problems which came up in land titling, and land acquisition. The Forum and its members had raised the issues from local landowners in Bhola to the AIIB multiple times, but due to the omission of this issue in the old AIIB ESF, the concerns on the ground remain unmitigated and partially addressed. The inclusion of these standards in the new ESF should therefore be ensured in policy implementation. ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN NGO Forum on ADB is gravely concerned with Section 39.0 as it still allows Clients with poor to zero ESMS to gain AIIB finance to do risky projects that directly threaten people and the environment. Under no circumstances should a Client be qualifying for AIIB funding without having an ESMS in equivalency to the ESP standards. The Forum’s had recommended immediate removal of this provision and urged the bank to ensure that until Clients have achieved equivalency to ESP they should not qualify to apply for AIIB loans to do projects. This recommendation was NOT taken into policy by AIIB in this new ESF. SECTION 7 INFORMATION DISCLOSURE The Forum recognizes the explicit mention of 60 days CAT A and 30 days CAT B release of project info as essential time frames for the public release of documents, such as environmental and social impact assessments. While the number of days has been explicitly set, it is still not adequate as project information, ESIA documentation needs to be translated in a language that is easily understood by local communities. We as NGO Forum on ADB do not consider this to be a meaningfully adequate time for local communities to assess and comprehend the risk for both CAT A and CAT B scale projects. Instead, the ESF further allows exceptions in article 66.0 for Clients to defer the release of critical project information further jeopardizing local communities to face environmental and social impacts. The AIIB ESF framework remains strikingly weak in addressing the lack of information disclosure within the growing trend of channeling investments through financial intermediaries such as commercial banks and private-equity funds. Even when these entities finance high-risk activities with AIIB support, they are not required to publish specific information regarding environmental and social impact. To prevent and alleviate harm, the AIIB should have ensured full disclosure of environmental and social impact assessments, including plans for land acquisition and resettlement, before project approval, when there is still a chance to influence the outcome. But the ESF demonstrates the bank’s intention to delegate the responsibility for accountability to its future clients. The broader risk is that the bank’s approach encourages weaker environmental and social standards across the board as international financial institutions compete for investment opportunities. The AIIB current ESF has some improvement on meaningful consultation with stakeholders in section 68.0 – 68.4 we hope these provisions will be duly implemented in order to explain project risks in a meaningful manner to local communities using appropriate cultural and language tools. RETALIATION AIIB’s acknowledgment of retaliation as a major concern is welcome but not enough to address this serious problem against affected communities. AIIB needs to take direct responsibility undertaking robust and comprehensive human rights due diligence to avoid adverse impacts, screening projects for reprisal risk prior to approval, developing protocols, contractual requirements, and other necessary leverage to identify, prevent, and mitigate risks for defenders, and conditioning investment decisions and disbursements on the ability to prevent abuses, ensure an enabling environment for defenders, and adequately address human rights impacts. The Bank, not the clients, should be mainly responsible for developing measures against retaliation including mitigation measures that include proactive engagement with communities to be affected by the project, proactive monitoring of the situation, and speaking out if and when retaliation against affected communities/persons/human rights defenders happen. PROJECT LEVEL GRIEVANCE REDRESS MECHANISM While the ESF provides guidance on GRM functionality, there is little indication of how information on concerns and overall GRM effectiveness is reported to the AIIB. This has led to a lack of information about GRMs generally and only anecdotal evidence of GRM functionality, some of it worrisome. The ESF should prescribe a systematic process for relaying GRM information from the project level to the AIIB and detail how the AIIB will correct issues where individual GRMs are shown to be ineffectual [9]. Civil society project site observations reveal that GRMs are not clearly visible. In cases of their use, the risk of retaliation from local authorities and project developers acts as a barrier to the issue of access. There is an oversight mechanism from AIIB which allows GRMs to mitigate retaliation risk. Consequently, project impact communities are not aware that the AIIB Accountability Mechanism/PPM is a viable option for addressing grievance issues in cases of GRMs not functioning. DISCLOSURE We commend the inclusion of language instructing clients to provide project-affected people with information about the PPM, in addition to the project’s GRM. By utilizing clients' logistical advantages for stakeholder engagement, the ESF will enhance awareness of the full accountability framework for AIIB-supported projects. This will increase access for project-affected people, ultimately bolstering accountability and fostering continuous institutional improvement. ESS1 – GHG, CLIMATE, & BIODIVERSITY AIIB continues to market itself as a ‘green and lean’ bank and yet the ESF review process failed at clarifying AIIB’s commitment to address the climate emergency and spearhead carbon-neutral development. While there is some positive language on climate change, it is disappointing to see the quantification of greenhouse gas emissions rendered as an optional stipulation left to the Client’s discretion. Additionally, Clause 42.2 outlines that “If the Bank determines that the Project is expected to produce or currently produces significant (emphasis added) levels of GHG emissions..” There is no clear, set target or threshold as to what constitutes as significant. This decision to use weak and noncommittal language is concerning and an indication of greenwashing rather than a commitment to climate change mitigation and adaptation as outlined by the Bank. Additionally, the language used on climate change throughout the policy is indicative of an approach that seeks to evaluate and mitigate climate change-related risks TO the project rather than how projects can aggravate and perpetuate climate change-related risks. The AIIB should go beyond just financing projects which are more adaptable to climate-related disasters and instead should take a proactive role in NOT financing projects which will contribute to severe environmental and climate-related impact. This will send a clear signal in the international fora that AIIB is truly a ‘green and lean’ bank. ON BIODIVERSITY CONSIDERATION We urged AIIB to consider direct and indirect, aggregated and cumulative Project-related impacts on biodiversity, ecosystems, and landscape, for example, habitat loss, degradation and fragmentation, invasive species, overexploitation, hydrological changes, nutrient loading, pollution, and incidental take, as well as projected climate change impacts. Consider the incremental impact of the action, when added to other past, present, and future actions. Any attention to project-specific impact should be immediately contextualized in terms of other anthropogenic stresses on the chosen valued ecosystem components. Focus on valued ecosystem components (VECs) that are likely to be subject to cumulative impacts against a threshold level of acceptable condition, if known, or in reference to a past baseline. Also, take into account the different values attached to biodiversity by affected communities and other relevant stakeholders. ON BIODIVERSITY IMPACTS Avoid adverse Project impacts on biodiversity. When avoidance of adverse impacts is not feasible, implement measures to minimize adverse impacts and restore biodiversity, including, as a last resort, biodiversity offsets. Offsets for adverse impacts in critical habitats only when the parameters for which the area is classified as critical are not involved. We recommend the use of suitably qualified and experienced biodiversity specialists to conduct the environmental and social assessment, to assist in the development of a mitigation hierarchy and to verify the implementation of mitigation measures. Address biodiversity as an element of the ESMP or ESMPF (or both, as applicable). In the case of complex situations, to prepare as appropriate, a biodiversity management plan and/or landscape analysis, which may be included in the ESMP or ESMPF or be self-standing. If the Project is located within a legally protected area, we urge AIIB to implement additional programs to promote and enhance the conservation objectives of the protected area. Take all measures required so that the Project also complies with any applicable national laws and regulations. ON NATURAL HABITATS If the project must be implemented in an area of natural habitats, refrain from any activity that would result in significant conversion or degradation; and if feasible alternatives are not available, take all measures required so that: (a) the Project’s overall benefits substantially outweigh the environmental costs, and (b) any conversion or degradation is appropriately mitigated through measures acceptable to the Bank. Apply these criteria when proposed actions under the Project could potentially cause deforestation or conversion of naturally regenerating forests. ON PROTECTED AREAS Where the Project occurs within or has the potential to adversely affect an area that is legally protected or internationally recognized or designated for protection, identify and assess these potentially adverse impacts and apply the mitigation hierarchy so as to avoid, or when avoidance is not feasible, to mitigate those adverse impacts that would compromise the integrity, conservation objectives or biodiversity importance of the area. Take all measures required so that the Project also complies with any applicable national laws and regulations relating to protected areas. On Regional and local spillover impacts of Operations nearby critical habitat and protected areas demand protected buffer zones, to minimize the impact of economic activity[10]. ESS3 – INDIGENOUS PEOPLES AND FREE PRIOR INFORMED CONSENT (FPIC) [11] We are deeply concerned that the ESF continues to require merely Free, Prior and Informed Consultation (FPICon) with the affected Indigenous Peoples against the international human rights standards of Indigenous Peoples requiring to obtain their Free, Prior and Informed Consent (FPIC) as embodied and agreed by nations in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). Furthermore, the FPICon is narrowly defined and invalidates collective consensus and unanimous FPIC by hinting towards disagreements within the Indigenous communities to still validate individual FPICs to represent the consent of the community. This is a clear manipulation of the usage of FPIC into FPICon and needs to be redrafted. Requirement of FPICon and FPIC only if the laws of the country where the Project is located is also inconsistent with the policies of other international financial institutions. FPIC is the only available self-determined tool for IPs that allows them to protect their land and resources from MDBs and other private and government operations, which do not fulfill their own development pathways. FPIC is a self-driven process that does not need the approval of the Client or any other body. It is vitally important to ensure a robust and direct consultation with Indigenous Peoples representatives on the design of ESF safeguards for Indigenous Peoples. The AIIB must adopt the FPIC definition as per the UNDRIP with no exceptions. There is a token mention of FPIC in the AIIB new ESF but it is NOT a binding requirement. The inclusion of a requirement for obtaining the FPIC is fundamentally important as it achieves the objective of ensuring that Indigenous Peoples can exercise their right to self-determination and are full partners in the development process. However, there is a need to ensure that the provisions for FPIC are consistent with the principle in the UNDRIP. It should be clear that the right to FPIC gives the affected community the right to give or withhold their consent to any program and project to be implemented in their territories. The process of decision-making and agreements reached with Indigenous Peoples based on their FPIC must be described and verified by the AIIB together with the Indigenous Peoples and independent experts. Further, any conditions made by Indigenous Peoples as part of their FPIC shall be clearly stated in the terms of the agreement, including time-bound actions and clear budget allocations necessary to ensure that agreements are met. Disclosure of information must be required to be in a language and inappropriate forms understood by the affected Indigenous Peoples. The involvement of Indigenous Peoples’ representative bodies and organizations must specifically include women, youth, and other community members in addition to councils of elders, village councils, or chieftains. Respect for the decision-making processes of Indigenous Peoples should be mandatory (and not where applicable) and must ensure respect for the independent and collective decision-making processes free from intimidation, manipulation, and any form of undue pressure. Further, with regards to the requirement of unanimity or disagreement within or among Indigenous Peoples affected for FPIC, the draft ESF should be revised as Customary decision-making processes of Indigenous Peoples respect and recognize the collective decision of the community resulting in an independent decision free from coercion or manipulation. Conflicting views shall be resolved by community members and the AIIB and the Client shall adhere to the final outcome of the decision-making process taking into account the legitimate views and issues raised by community members as bases for their decision. Finally, if AIIB is unable to ascertain that FPIC is obtained in conjunction with the concerned and affected Indigenous Peoples, it should require the Client not to proceed further with the aspects of the Operation that are relevant to those Indigenous Peoples, or the entire operation and not merely require that the Client ensures the Operation will not have adverse impacts on such Indigenous Peoples. PROJECT AFFECTED GRIEVANCE & PEOPLE MECHANISMS Access to a fair and impartial grievance redress mechanism (GRM) is of utmost importance in ensuring the appropriate checks and balances are in place and providing access to remedy to the most vulnerable. This draft of the ESF outlines enhanced access to GRM in Sections 71- 73. The policy even goes beyond in including provisions on protecting “complainants from retaliation” (Section 71.2.d.i) These are welcome additions to the policy. Nonetheless, the reliance on the co-financer’s Independent Accountability Mechanism (IAMs) excludes an entire class of complaints. The ability to choose which mechanism is most appropriate should be left to the complaint to determine on the basis of their case. As is the case with other international financial institutions (IFIs), when complaints are filed in more than one mechanism, IAMs coordinate to assess the cases and drive them towards a mutually agreed positive outcome, as well as establish institutional learning and accountability. Accountability should follow the investment trail. AIIB capital has been disbursed to finance large infrastructure projects with detrimental effects on people and the environment, and yet not once has it been held accountable for the project outcome. Hiding behind this veil of inaccessibility is truly a missed opportunity for the AIIB to enhance its institutional memory and learning process. There is also a lack of clear standards regarding the design of a GRM. Statements such as: “The GRM is scaled to the risks and impacts of the Project” ( Section 71.2), “may utilize existing formal or informal complaint-handling mechanisms” (Section 71.2), “and deemed by the Bank to be suitable for the Project” (Section 71.2). It is not clear whether the Bank intends for the GRM to supersede access to the PPM or rather to completely incapacitate affected people from accessing the PPM. ESEL EXCLUSION LIST The AIIB should explicitly exclude all projects that are misaligned with the Paris Agreement’s 1.5C goal to limit global warming, and add these to the Environmental and Social Exclusion List (ESEL, p73). This should include coal, as well as oil and gas – upstream and downstream. Most MDBs include specific exclusions of fossil fuels in their policies, including in the ESF. For example, the European Investment Bank (EIB) has announced that it will no longer support fossil fuel energy from the end of 2021, and other MDBs such as the Inter-American Development Bank (IDB), have included specific exclusions on thermal coal mining or coal-fired power generation, and upstream oil and gas exploration development projects. AIIB management has argued that such issues should be dealt with in the Energy Sector Strategy, but this is not sufficient: other sectors are highly relevant to climate change and so should be addressed in the overarching ESF. In addition, associated facilities and fossil fuels for industrial use should be excluded, such as coal for cement production. Other environmentally damaging projects, such as greenfield large-scale hydropower plants should also be excluded[12]. NO TO NUCLEAR The AIIB Exclusion List fails to have clear and unambiguous prohibitions on support for nuclear-related facilities. In fact, in its current Energy Sector Strategy, the provision on nuclear power generation includes the following caveat, “Should demand to arise for very special cases of support for safety improvement, the Bank could possibly consider engagement” (para 39). Financing for any nuclear facilities should be unequivocally placed on the Bank’s exclusion list. Meanwhile, the ADB states clearly, “The following do not qualify for Asian Development Bank financing...” Whereas the International Finance Corporation (IFC) states clearly that, “The IFC Exclusion List defines the types of projects that IFC does not finance. IFC does not finance the following projects...” On the other hand, the World Bank has “excluded expenditures” and prohibitions. In the case of AIIB, it states: “AIIB does not knowingly finance Operations involving the following:” In sharp contrast to the other MDBs, the AIIB list makes no prohibition on support for: “production of or trade in radioactive materials, including nuclear reactors and components thereof;” “production or activities involving harmful or exploitative forms of forced labor or child labor” (This is notwithstanding the discussion of prohibition of certain types of labor in the body of the AIIB safeguards but not in the exclusion list.) In addition, IFC also prohibits support for Financial Intermediaries engaged in “production or trade-in wood or other forestry products other than from sustainably managed forests” while the AIIB does not. IFC also prohibits (apparently only for microfinance projects) “production or activities that impinge on the lands owned, or claimed under adjudication, by Indigenous Peoples, without full documented consent of such peoples.” NO TO COAL The current AIIB exclusion list does not prohibit the development or use of coal-based energy[13], despite the fact that President Jin Liqun has already made public commitments to rule out coal going forward beyond 2021. Consistent with the most recent climate science outlined in the latest Intergovernmental Panel on Climate Change Assessment Report (AR 6), published in August 2021, the IEA’s Net Zero by 2050 Roadmap for the Global Energy Sector (May 2021), as well as current coal financing restrictions established by other multilateral development banks and member country governments, including most recently China[14], the AIIB’s Environmental and Social Framework must explicitly elaborate exclusions for finances implicated in the upgrading, retrofitting or expanding of facilities that rely on coal (including co-fired plants and captive coal power for industrial processes), ensuring no projects receive financing unless they meet a GHG emissions performance standard (EPS) set according to accepted international standards that by default excludes coal financing. As coal project developments are also facilitated by the expansion of associated infrastructure upon which a coal plant depends, including ports, rail links, and transmission and distribution networks, the AIIB must clearly and unequivocally avoid financing associated facilities that may end up supporting any aspects of coal-related value chains. NO TO FINANCING PROJECTS IN CONFLICT ZONES [15] Similarly, financing projects in conflict zones must be included in the AIIB Exclusion List. As it is evident, there is hardly an established rule of law in conflict areas. Thus, investments on procurement, personnel, natural resources, land, labor or infrastructure may all lead to further divisions between the various factions and exacerbate the imbalances in the power dynamics of the proposed project area. Any provision for human rights, environmental standards, labor standards, public participation would hardly bear relevance or traction within the conflict zone context. Since establishing peace and democracy becomes the highest priority; we urge AIIB to set a precedent through absolute disinvestments in conflict zones thereby setting an example for responsible development financing. BAN ASBESTOS AIIB, which purports itself as a clean, green, and post-Paris Bank, should ban deadly asbestos in all its projects and should no longer hide behind other MDBs in the name of co-financing and alignment[16]. ADDITIONAL CONCERNS OVER DIGITAL INFRASTRUCTURE ON LABOR, CLIMATE AND PRIVACY Regional cooperation, digital Infrastructure, and transboundary projects were key themes being pushed during the AIIB 5th Annual Meeting yet there was no mention of it in the proposed ESF. On the digital infrastructure front, themes discussed included – artificial intelligence (AI), internet of things (IoT), transport, and automation not so much on their impact on the environment, employment, and energy demand. It is being feared that automation in storage and transport will have a direct impact on the unemployment of large masses of human labor, which requires further research and thorough social risk assessment by AIIB. Consequently, the digital infrastructure projects, such as mobile towers, server warehouses, and automated service points, will all need to be powered and maintained from an energy point of view. The issue of energy systems powering digital technology and infrastructure has to be done in line with the Paris Agreement of 1.5 and therefore requires a much deeper questioning. There is a high probability that without the right energy framework, the digital future strategy may further embed existing fossil fuel pathways. Digital technology issues also have a direct impact on privacy and security. With rising authoritarianism, the use of digital surveillance through digital technology will have a direct impact on democratic freedoms. We are deeply concerned that without ensuring privacy and protection of constitutional freedoms, digital technology will have a detrimental role in increasing further censorship of the press, suppression of critical voices who are seeking to uphold accountability and transparency. Endorsed by the following organizations – ARTICLE 19, UK Asian Peoples' Movement on Debt and Development (APMDD), Regional Asociación Ambiente y Sociedad (Environment and Society Association) – AAS (Colombia) Bangladesh NGOs Network for Radio and Communication, Bangladesh Center for Environmental Justice, Sri Lanka Centre for Human Rights and Development, Mongolia Center for International Environmental Law (CIEL) CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh Committee for the Abolition of Illegitimate Debt, India consumer NGO, Mongolia Derecho Ambiente y Recursos Naturales DAR, Peru Environics Trust, India Environmental public society, Armenia Equitable Cambodia, Cambodia Foundation for Environmental Management and Campaign Against Poverty (FEMAPO), Tanzania Fresh Eyes, United Kingdom Global Rights, Nigeria GrowthWatch, India Grupo Regional de monitoreo sobre Financiamiento e Infraestructura (Latin America/regional) Healthy Public Policy Foundation, Thailand Indian Social Action Forum, India Initiative for Right View, Bangladesh Latinoamérica Sustentable (LAS), Ecuador Movement for Advancing Understanding on Sustainability And Mutuality MAUSAM, India Narasha Community Development Group, Kenya Nash Vek, Kyrgyzstan National Fisheries Solidarity Movement, Sri Lanka Oil Change International, United States Oil Workers' Rights Protection Organization Public Union, Azerbaijan, Oyu Tolgoi Watch, Mongolia Plantation Workers' Union (PWU), India Program on Alternative Development, University of the Philippines Center for Integrative & Development Studies, Philippines Protección Internacional Mesoamérica, Mesoamérica Rivers without Boundaries, Russia and International Universal Peace Federation, Myanmar urgewald e.V. (Germany), Germany WomanHealth Philippines, Philippines Youth Group on Protection of Environment, Tajikistan [1]Urgewald had also published their own input which can be accessed here: https://urgewald.org/sites/default/files/media-files/2021-06%20urgewald%20critical%20brief%20AIIB%20ESF%20review%20.pdf [2] https://storymaps.arcgis.com/stories/065d18218b654c798ae9f360a626d903 [3]https://www.aiib.org/en/news-events/news/2020/AIIB-Joins-MDBs-to-Launch-the-First-Join-Report-on-Financing-the-Sustainable-Development-Goals.html [4] https://www.who.int/en/news-room/fact-sheets/detail/violence-against-women [5] Gender Action 2018, Gender Scorecard and Analysis of AIIB Projects: A Documentary Review, p.8 [6] Please note that a formal letter from 44 civil society organizations requesting that the Bank improve how it handles gender issues and their critical intersection with the global climate crisis was sent by Gender Action on October 25, 2021, to President Liqun Jin and other senior staff. [7] With inputs from Life Haven, Inc. (Philippines) [8] https://www.inclusivedevelopment.net/ [9] Inputs from Accountability Counsel [10] Inputs from BothENDS [11] Inputs from Community Empowerment and Social Justice Network (CEMSOJ) based on the comments of the Asia Indigenous Peoples Pact (AIPP) for the AIIB’s first ESF review available at the link https://www.business-humanrights.org/en/latest-news/asia-indigenous-peoples-pact-aipp-comments-on-draft-of-aiib-framework/ [12] Inputs from Recourse. [13] In August of this year, President Jin Liqun was quoted in reference to the Bank's Energy Sector Strategy, as saying: in the "updated strategy, coal definitely would be out" See: https://www.chinadaily.com.cn/a/202108/06/WS610c7517a310efa1bd666fa6.html [14] At the UN General Assembly in September, President Xi Jinpeng affirmed that no new financing for coal abroad would be approved. (“China headed towards carbon neutrality by 2060; President Xi Jinping vows to halt new coal plants abroad”: 21 Sept 2021). [15] With inputs from North East Peoples Alliance (India). [16] Inputs from Environics Trust. Download the PDF version here.

Manila, Philippines – As the 6th Asian Infrastructure Investment Bank (AIIB) 2021 Annual Meeting, themed “Investing Today, Transforming Tomorrow”, opens today – days before COP26 in Glasgow – civil society organizations (CSOs) around the world have come together to highlight key critical concerns about the way the bank’s investments to date are already undermining peoples’ rights and ecosystem resilience, and about the institutions’ plans going forward, in light of the urgency of the climate, debt and health crises. In this context, civil society organizations are asserting a wide range of concerns about the specific projects and initiatives financed since the AIIB’s inception in 2016, while also issuing specific questions about the Bank’s policy frameworks being incorporated into its “Infrastructure for Tomorrow” (i4t) approach. By all accounts, they charge the Bank with exacerbating social and economic despair, the crisis of illegitimate debt within borrowing member states, the security of environmental and human rights defenders, and toxic contamination of planetary commons; all without any regard for transparency or accountability. As Rayyan Hassan, Executive Director of NGO Forum on ADB explained: “Time and again, we have seen the AIIB insulate its annual meeting from direct engagement with project-affected communities, systematically averting any meaningful integration of our concerns into program sessions and consistently denying us the opportunity to organize or even co-host sessions within the formal agenda. While the bank has formalized its new corporate strategy, rolled out a new Environmental Social Framework, and is expected to announce timelines for revising its Energy Sector Strategy, the voices of existing project impacted communities once again remain unheard through this virtual meeting agenda.” Dr. Nora Sausmikat, Head of the China Desk at Urgewald in Germany, stated, “The one who gives money bears responsibility! A multilateral bank initiated by China focussing on building infrastructure causing huge interventional into the social and environmental environment needs strong safeguards. Operating six years without time-bound information disclosure is a scandal.” Vidya Dinker, of GrowthWatch in India, elaborated further, “We see AIIB financing more and more projects that are non-transparent, cause environmental damage, biodiversity loss and serious violations of human rights, like in the Bangalore Metro Rail Project, while stubbornly refusing to be accountable. We, South Asians, are already vulnerable to climate change. Clearly, the bank is a part of the problem and not the solution as they'd like to project.” “AIIB should not allow projects offering support to rogue governments into its pipeline – like approving the 116-million-Euro project to the illegitimate regime of the Belarusian dictator Alexander Lukashenko for purchasing medical equipment and paying unnamed consultants. With little or no transparency in the procedures and the dysfunctional system of justice, the loans given to such governments will most likely be misused or stolen” says Art Ledovsky of the international movement of Belarusian communities ‘Belarusians Abroad’ As Dustin Schäfer of Urgewald enumerated, “six years of operation, 142 projects and over $28 billion invested, the Project Affected Peoples’ Mechanism (PPM) has yet to receive a single complaint. The empirical evidence is concerning and leaves many questions unanswered. Therefore, the PPM review must be open and transparent, involving not just other Independent Accountability Mechanisms and Multilateral Development Banks, but also NGOs and of course, those affected by AIIB projects. The AIIB should consult not only on the policy itself but on the scope of the review, its timeline, and the plan for consultation.” Petra Kjell Wright, Campaigns Manager at Recourse in the UK, added: “The worsening climate crisis threatens and affects all humanity, but it does not do so uniformly. Existing gender inequalities aggravate gender-differentiated climate change impacts, in particular for women and other marginalised gender groups. Despite years of civil society pressure AIIB has failed to take gender issues seriously. We call on the AIIB to finally make amends and implement a mandatory, robust and freestanding gender policy, which also recognises the impact of the global climate crisis.” Lidy Nacpil, Coordinator of the Asian Peoples Movement on Debt and Development, explained: “We are living in the most climate-vulnerable countries in the Global South that suffer from fossil fuel projects supported by financiers like the Asian Infrastructure Investment Bank. The AIIB claims to be lean, clean, and green but has spent almost half of its energy portfolio on fossil fuels and still intends to fund fossil gas as a transition fuel. There is no more space to further expand fossil fuel production. We urge the AIIB to revise its Energy Sector Strategy to explicitly exclude coal, oil, and gas in future financing and immediately phase-out of all existing finance and assistance for fossil fuels, direct and indirect.” Tanya Lee Roberts-Davis, Energy Policy and Campaigns Strategist at the NGO Forum on ADB concluded: “The Bank has undermined - rather than upheld - i4t’s stated pursuit of environmental, social, and economic sustainability, in the very places that are at the frontlines of the climate crisis. With COP 26 on the immediate horizon, what better time for the Bank to confirm its Energy Sector Strategy will be revised through a robust public consultation process? Crucially, at this year’s Annual Meeting, they can – and must – commit to upholding provisions in a revised energy policy that rule out any further financing of fossil fuel and other destructive energy infrastructure projects (such as large dams and waste-to-energy incinerators), and instead incorporate actionable support for just, sustainable, inclusive energy transitions, wrested in the hands of publicly accountable institutions, with the utmost regard for all international human rights standards and conventions.”

In advance of October 20th, when the ADB Board of Directors is scheduled to decide whether or not to approve the 2021 Energy Policy (R-Paper), we are calling for the vote to be suspended until its provisions are thoroughly scrutinized and revised according to a more nuanced consideration of: the current energy and climate challenges facing remote, rural, urban and peri-urban communities across Central, South and Southeast Asia and the Pacific, the latest climate data and analytics available[1], robust assurances of alignment with all international human rights frameworks, inclusive of the right to a clean, healthy and sustainable environment, as recognized this month by the UN Human Rights Council, and all ILO Conventions, as well as ensuring public disclosure and accessibility of associated guidance documents, open to a process of robust consultation. Until and unless the ADB management and staff go back to the drawing board, the R-Paper as it stands demonstrates a severe lack of ambition in the face of the absolute urgency to end the expansion of new fossil gas, oil and coal-related infrastructure facilities and to invest in distributed renewable technologies that are appropriately scaled, non-resource intensive, and prioritize decentralized, community owned and operated systems across the region. Significantly, the R-Paper’s suggestions for the way forward still lack any substantive promises to support investments in an energy transition that would ensure projects, policies and plans financed will explicitly uphold international human rights conventions and frameworks related to a just, inclusive, sustainable transition and rights to a clean, healthy environment. Instead, the wording of its provisions have shifted towards heavily relying on outdated assumptions about deploying gas as a bridge fuel, and expensive, risky, resource-intensive technologies not fit for the purposes of supporting a forward looking agenda for just transition. Taken together, the revised provisions in this final version of the policy can only be expected to facilitate carbon lock-in and exacerbate social, economic and ecological crises across Asia and the Pacific (most especially due to new wording that implies boosting support for grossly expensive and risky LNG terminals, oil and gas pipelines, carbon capture and storage ventures, geothermal and waste-to-energy projects as well as large-scale dams). Furthermore, the revised version of the policy now lacks any explicit reference to substantively enable electrification for last-mile, remote, island and conflict affected communities (e.g. by maximizing the potential of decentralized renewables, or supporting off-grid renewable solutions for the purposes of universal access); suggesting instead a future reliant on dirty, unnecessary, outdated petroleum-based technologies is somehow acceptable for the purposes of meeting the needs of the some of the most climate vulnerable populations in the world. Energy Sector Climate Financing Are Not An Assurance of Paris Alignment We are fully aware of the ADB’s recent announcement on scaling-up climate financing in the next ten years. In fact, we expect no less from a public development bank that claims to direct its investments towards ensuring a “prosperous, inclusive, resilient, and sustainable Asia and the Pacific”. Yet without any public disclosure of what – if any – robust screening criteria will be applied to avert exposure to investments directly involved in the expansion of fossil fuel and other resource-intensive sectors, there are no assurances that the ADB’s financing for mitigation, adaptation and resilience will not significantly undermine global efforts to limit temperature rise to 1.5C. In light of critical questions raised both by the ADB’s own Independent Evaluation Department in their most recent thematic report on the ADB’s track record in climate action over the past ten years, as well as the testimonials of groups working in and with communities affected by the ADB’s energy sector financing, it is clear that R-Paper’s provisions to support transmission and distribution infrastructure, household connectivity projects and power generation sites reliant on gas, oil, mega-dams and waste incineration, simply do not fit the check-box of aligning with the imperatives of the Paris Agreement. In addition, we note with concern that the R-Paper uses more explicit language to promote private sector and financial intermediary modalities, two specific areas critiqued by the IED as routinely failing to clearly meet any climate-related targets or take into account assessments of related climate risks [CRAs}. For example, according to the report: “Financial intermediary projects were problematic since the exact nature of the subprojects is unknown [at the time of appraisal] and CRAs are often ambiguous”. (para. 203) We are also cognizant of ADB’s new online portal announcing its self-proclaimed debut as the ‘climate bank’ of Asia and the Pacific. In this regard, we note the featured infographic about the Energy Policy Review, which suggests the policy will support principles for an energy transformation, such as (i) end-use efficiency, (ii) low and zero carbon infrastructure, (iii) electrification of transport, industry, cooling and heating systems, (iv) the decarbonization of grids and ( v) provision of distributed renewable energy. The online posting reiterates support will be focussed on last-mile access, off-grid solutions, a rapid phase-out of coal, a just transition, strengthened regulatory frameworks, regional cooperation and connectivity, and comprehensive development impacts. We rigorously denounce the R-Policy as failing to reflect a robust application of the above principles, undermining rather than upholding climate science and a people-centred rights-based framework. It is in this regard that we wish to bring your attention to the following key concerns illustrating why we are denouncing the policy as one which is neither Paris-aligned[2] nor geared towards supporting an inclusive, sustainable, just transition across Asia and the Pacific.[3] On last mile connectivity and off-grid solutions: The revised 2021 Energy Policy lacks any concrete commitments to meet the electrification needs of last-mile communities, with several references existing in earlier drafts deleted. Instead, supporting last-mile energy access is noted only once (para. 96), and in this regard, only in relation to the recommendations for borrowing member states to adjust and implement updated power development plans. This adjustment is alarming, considering recommendations of the ADB’s Independent Evaluation Department that the Bank needs to shift gears towards meeting the needs of remote and hard to reach communities, and that this is where the ADB’s finances are most needed in order to support a just, inclusive energy transformation in the region. Petroleum-based systems are explicitly suggested for meeting the needs of communities without access to main electrification grids, as opposed to earlier wording suggesting they would be used as back-up for renewables. This is unacceptable given that better, economically and environmentally sustainable decentralized options exist that would not rely on new oil and gas extraction and avoid putting communities at risk of exposure to noxious emissions or contaminated soil and waterways. On the rapid phase-out of coal and “just transition”: The revised wording in the policy fails to explicitly exclude support for operations reliant on coal, including via channeling investments into co-fired projects, via T & D infrastructure and industrial processes. Fossil gas projects, including LNG terminals (para. 76), are explicitly promoted as part of the energy transition, as are petroleum-based systems, specifically in isolated and remote areas, and fragile and conflict-affected situations (para. 74), creating unnecessary and unacceptable conditions for carbon lock-in rather than supporting the critical need for an immediate, urgent shift towards renewables. The use of fossil gas based ‘blue hydrogen’ has now been added into the provisions of the policy for deployment in hard-to-decarbonize sectors, rather than limiting financing hydrogen options to those exclusively based on ‘green technologies’. In light of the most recent climate science from IPCC’s AR6, there is simply no time to waste still financing projects that are fossil fuel reliant when newer, cleaner technologies and solutions are emerging and available to be scaled up. No screening criteria is included to ensure financial intermediary subprojects do not facilitate further burning of coal, oil or gas – indicative of a critical lack of due diligence on the part of the ADB, given that other MDBs have already taken steps in this direction. Wording on the ADB’s support for advising borrowing countries towards a just transition remains ambiguous, and without references to Paris-alignment or international frameworks, such as those developed by the ILO, nor any indication of how planning for the transition will be rolled out in communities affected by the ADB’s own investments in fossil fuels or other climate mis-aligned operations (e.g. large dams and waste-to-energy projects). On strengthened regulatory frameworks: With increased promotion of public-private partnerships and support for private sector involvement, there are no guarantees that stringent national and international regulatory frameworks will not end up being undermined, including those related to access to information, the right to a healthy environment, measures to promote zero/minimal waste production and environmental protection (including for example, the increasing trend in borrowing member countries to recognize rivers as living entities), as well as labour rights, women’s rights, indigenous peoples’ rights and the rights of people with disabilities among others. Socially, environmentally and economically risky as well as unproven technologies, such as carbon capture and storage facilities for fossil fuel-based power plants as well as industrial-scale blue hydrogen projects and infrastructure (reliant on fossil gas burning) are further promoted in the R-Version (paras. 73, 77, 78). Wording on the social cost of carbon has become highly ambiguous in terms of the base rate, annual scaling, and how calculations will align with international best practices. This is particularly concerning in light of the IED’s recent analysis (see pg xxii) suggesting that the ADB remains in a laggard position in this regard (in relation to other MDBs), as current carbon pricing by the ADB is set against standards from 2014 (IPCC AR 5) as opposed to more updated evidence-based analyses. The R-Version still lacks any suggestion of time-bound commitments to align equity investments, loans and direct project financing in the energy sector with the provisions and objectives of the Paris Climate Accord. On increased energy security through regional cooperation Power connectivity provisions in the R-Version more explicitly highlight the LNG and gas projects, without any accountability or regulatory frameworks suggested on how to cope with cross-border resource-related disputes and accidents, or how such projects would avert carbon lock-in. Given the challenges in terms of enforcing robust regulatory frameworks to protect the rights of people in border zones, holding project proponents accountable for ecological harm, let alone demanding reparations when damage to peoples’ livelihoods and environments may be irreversible, there is no reason financing such risky projects should be retained in the ADB’s 2021 Energy Policy. No screening is suggested to ensure T & D infrastructure do not facilitate the operation of associated coal powered or co-fired coal and gas facilities, large-scale hydropower dams or waste-to-energy and nuclear power sites that would undermine not only the Bank’s own safeguards, but also global efforts to maximize resilience and minimize the expansion of resource-intensive projects, effectively wreaking havoc on surrounding ecosystems and local people. On the bank’s development impacts: Wording related to commitments to renewable energy development, especially for hard-to-decarbonize sectors such as industrial processes, heating and cooling have been removed, revealing a complete lack of foresight given the rapid technological advances that mean cleaner, non-fossil fuel reliant systems do exist, and could be deployed with the Bank’s support. The provisions on large-scale hydropower projects have been revised, removing support for key assurances related to safety, accountability and ecological considerations, most especially for affected communities living around, upstream or downstream of dams (with requirements for cumulative impact assessments or involvement of independent environmental, social, and dam safety experts deleted in the R-Version in para. 70). In effect, retaining the notion that large-scale dams can be developed sustainably, combined with dropping such precautionary requirements in the planning, development and operational stages of these projects, amounts to nothing less than putting the lives of millions of riparian peoples in countries across the region on the line. Large-scale waste-to-energy projects for heating or electricity purposes (para. 71) and large-scale biogas projects that feed into current gas networks (para. 78) remain options for the Bank’s investments, rather than taking into consideration the ways in which communities in surrounding areas will be affected. Finally, the R-Version fails to provide any clarity on whether accompanying guidance notes will be made publicly available, let alone subject to a process of robust public consultation. We therefore urge you to scrutinize the R-version’s provisions and ask you to consider if you are willing to be held accountable for the damage to communities, ecosystems and to global climate ambitions this policy inevitably will incur. Although the 2021 Energy Policy will be reviewed and revised again within the coming five years, this is no excuse for dismissing the impacts it will have over this time. Indeed, if this policy is approved as it stands, we trust you are aware that civil society groups, including those in the communities most impacted by the ADB’s own investments, will be holding the Bank responsible for the implications of the 2021 Energy Policy’s provisions put into practice. Thank you for your time and we look forward to hearing any response you may have. Signed on behalf of the following organizations: 350 Pilipinas, Philippines 350.org Asia, Asia Aksi! for gender, social and ecological justice, Indonesia Asian Peoples' Movement on Debt and Development (APMDD), Asia Bank Information Center, USA Center for Energy, Ecology, and Development, Philippines Centre for Environmental Justice CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh Community Empowerment and Social Justice Network (CEMSOJ), Nepal ENVIRONICS TRUST, India Environmental public society, Armenia Equitable Cambodia, Cambodia Federation of Community Forestry Users Nepal (FECOFUN), Nepal Freedom from Debt Coalition (Philippines), Philippines Fresh Eyes, United Kingdom Friends of the Earth Japan, Japan GAIA Asia Pacific, Regional Gender Action, Global Growthwatch, India Indian Social Action Forum (INSAF), India Initiative for Right View, Bangladesh International Association of People's Lawyers, Australia International Rivers, Thailand Kilos Maralita (KM), Philippines Lumiere Synergie pour le Developpement, Senegal Mekong Watch, Japan Nash Vek Public Union, Kyrgystan Ole Siosiomaga Society Incorporated (OLSSI), Samoa Peace Point Development Foundation-PPDF, South South, Nigeria Peoples Development Institute, Philippines Recourse, Europe Sustainability and Participation through Education and Lifelong Learning (SPELL), Philippines urgewald, Germany Youth Group on Protection of Environment, Tajikistan [1] See for example, the August 2021 Assessment of the Intergovernmental Panel on Climate Change (IPCC AR6), new scientific data released on appropriate scaling of the social cost of carbon (inclusive of mortality implications), as well as social, economic and ecological risks associated with carbon capture and blue hydrogen technologies. [2] To ensure financing committed is in line with the spirit and word of the Paris Agreement, we look to the guiding note on "Principles for Paris Aligned Institutions" endorsed by civil society organizations and social movement alliances worldwide, which asserts that ​"Financial institutions (FIs​)​ that commit to ‘Paris alignment’ must also commit to aligning with the Paris Agreement’s goal of limiting global warming to 1.5°C while respecting all human rights and the specific rights of Indigenous Peoples.​​” [3] For more specific language changes, please see the appended chart, where a detailed overview of the differences between the R and W Paper are outlined below.

Introduction On behalf of the NGO Forum on the ADB -- a broad membership-based network of civil society groups and alliances directly in communication with communities affected by ADB projects and investments across the region -- we write to acknowledge and input commentary on the revised “Energy Policy Working Paper”, as published by ADB’s Sustainable Development and Climate Change Department (SDCC) on 16th August, 2021. In this regard, we express our urgent concerns with the current elaboration of the Working Paper’s policy provisions, in particular as it contradicts and undermines firm positions taken by the Bank’s shareholder governments (e.g. the UK, US, and Germany, among others) as well as other MDBs on burning questions related to (i) sustainable energy and climate protection, (ii) refraining from dispersing funds for coal (inclusive of financial intermediary modalities), (iii) trade in oil, (iv) new gas infrastructure, (v) nuclear energy, and (vi) incineration of waste to meet the world’s heating, cooling and power needs. Unfortunately, from the perspective of the NGO Forum on ADB’s membership, in the current iteration of this document, SDCC has failed to advance a policy that would duly take into account the latest climate science as articulated by the Intergovernmental Panel on Climate Change in August 2021 (IPCC Assessment Report 6). We also do not consider it Paris-aligned.[1] With the understanding that a very brief window of opportunity remains before the finalized draft is submitted to the Bank’s Board of Directors for approval, below we share the most critical issues we recommend be addressed with immediacy. We advance these points from the perspective of what is absolutely required of the ADB at this juncture in time if, as a multilateral development finance institution, it is going to move into a forward-looking position towards international climate accountability, supporting national and local resilience, and a just transition grounded in internationally accepted social, economic, and environmental concepts. Without such a policy recalibration, the ADB management risks relegating the institution to the status of a laggard in front of the global community as we head into the pivotal lead up to COP 26 this November 2021. Closing the Gaps and Exceptions in ADB’s ‘Withdrawal’ from Coal We appreciate that the ADB has retained wording as expressed in paragraphs 59, 74, 90 and 105 related to supporting a phase-out of coal-fired power and heating facilities, and to formally withdraw from financing “coal mining, processing, storage, and transportation, nor any new coal-fired power generation”. However, the question that must be borne in mind is that the policy provides no time-bound or firm, proactive commitments for the rapid powering-down of coal facilities required to put an end to dirty and dangerous emission levels. Nor does it specifically provide any references to ADB’s own current and legacy coal project investments, some of which remain operational, continuing to emit air-borne greenhouse gases, contaminating surrounding ecosystems, and inducing ill-health as well as premature deaths in local communities. Furthermore, the provisions in the policy do not close the door on offering support for coal-related industrial processes or on investments in coal assets via financial intermediary modalities - directly in contrast, for example, with the recent US Treasury’s August 2021 “Fossil Fuel Energy Guidance for Multilateral Development Banks (MDBs)”. Indeed, the loose wording and loopholes in current policy provisions provide grounds for significant concern as exemplified in the ADB’s first piloting of support for coal project retirement (Project Numbers 55124-001/ 55024-001). Already, a range of civil society groups have raised serious questions about the opaque key terms of reference for the technical assistance being offered in the Southeast Asian Region under the banner of “Accelerating the Clean Energy Transition in Southeast Asia” (e.g. no clarity on which coal plants are to be targeted, how many years of financed transition will be deemed acceptable, and what fundamental principles are being applied to ensure partnering banks/asset managers/insurers are not deeply entwined in conflicted business interests in the coal sector). As per internationally accepted ‘polluter pays’ principles, if the ADB management wishes to demonstrate meaningful alignment with a just, sustainable and inclusive transition, it is incumbent upon them to categorically reject the provision of limited public funds for bailing out the very companies that should be held accountable for the damages wrought by operating coal fired plants.[2] Heeding Climate Science: Unequivocally End Support for Fossil Gas and Oil Crucially, the Working Paper in no way distances the Bank from freely investing in, financing or providing technical advice for the expansion of new fossil gas and oil dependent operations, instead indicating head-on direct and intermediary support for fossil fuel operations and associated facilities. As a result, the Bank remains fully out of step with the dire warnings of the most recent IPCC Sixth Assessment Report (AR6: August 2021) as well as those of the UN Director General Antonio Guterres, imploring governments and financial institutions alike to direct their undivided and unequivocal attention towards ending all new fossil fuel infrastructure -- keeping oil, coal and gas in the ground. By simply not taking such direct international guiding perspectives into account, the ADB will, without a doubt, fail to heed scientific reason and logic, recklessly undermining the efforts of all of us who are prepared to fight for the survival of our common humanity under a 1.5C scenario. We also note this stands in contravention to the above mentioned US Treasury’s “Fossil Fuel Energy Guidance for Multilateral Development Banks (MDBs)” We therefore urge the ADB management and board to reconsider the negligent wording of the provisions of this Working Paper, including specifically paragraphs 73 - 75, which suggest (i) offering support for “petroleum-based backup systems”, including in remote areas and in fragile and conflict-affected situations, (ii) partnering with local banks to boost the operations of “international trade and supply chains” that “involve trading in oil... to keep economies running”, (iii) investing in fossil gas infrastructure such as “pipelines, liquefied natural gas terminals, and storage facilities” and “end-use facilities” as well as (iv) supporting local/household-level distribution networks with gas-related fuels. Going forward, if these policy provisions are to be operationalized by the Bank, not only do they fail to uphold goals aligned with the Paris Agreement and IPCC recommendations, but furthermore, threaten to exacerbate injustice and human rights violations through designating fragile, conflict affected and remote areas as sacrifice zones. In addition, given readily deployable solar and wind technologies, it appears from the provisions of the Working Paper that the ADB management prefers to remain blind to least cost economic and environmentally responsible energy scenarios currently available. Instead, the policy language articulated suggests engaging in the build-up of fossil fuel-reliant energy sources, locking in toxic, heavy GHG emitting infrastructure for the purposes of “space heating, cooling, domestic demand, industrial energy applications”, or…”to improve energy access”. With communities across the region already facing deep economic, environmental and climate crises, it is not clear why the ADB would sink finite resources into outdated, inappropriate and climate-conflicted technologies. Drop Suggestions for Deploying Onerous Carbon Capture Technologies Furthermore, this Working Paper suggests shifting limited budgetary resources into carbon capture, utilization and storage schemes -- that by default employ technologies repeatedly unproven to be scalable or economically viable (including as reported just last month in the UK Guardian). Most notably, CCUS ventures are associated with prohibitive costs, have consistently failed to actually support any proven decarbonization measures for industrial fossil fuel dependent processes, depend upon continued extraction of coal, oil and gas better left in the ground, and have potentially devastating environmental, health and safety risks for surrounding communities (where underground storage and associated infrastructure works would be located). We note, for instance, that the ADB’s suggestion to support deployment of carbon capture ventures would require investing in onerous large-scale pipeline infrastructure. Yet there are no associated policy provisions to confirm robust and stringent adherence to the ADB’s safeguard policy. Indeed, any rupture or accident along such associated facilities would mean people’s lives in the surrounding areas would be at risk, since the immediate release of such volumes of CO2 (as an asphyxiant gas), would lead to the coating of nearby land and watersheds with super-cold dry ice (dropping temperatures to below -60C), while potentially also wreaking further health and ecological havoc with the toxic release of contaminants such as hydrogen sulfide. Notably, the ADB lacks any such operational guidance on the safe deployment of CCUS or mechanisms developed to provide reparations for the loss, harm and damage that may be wrought because of such risky technologies. Furthermore, despite referencing “green hydrogen” as an emerging technology suitable for accelerating renewable energy deployment (para. 24, 64), the paragraphs in the policy pertaining to carbon capture also contain language related to the production and use of “sustainable hydrogen” without defining clearly whether or not this is derived in part or in entirety from fossil fuel-reliant processes. This lack of clarity needs to be addressed by affirming that fossil fuel sourced hydrogen is neither sustainable nor an acceptable source of ‘renewable energy’. We are further alarmed by the Working Paper’s startlingly low standard unit cost of carbon suggested to be applied to energy sector investments, standing at under approximately 43 USD. This is in stark contrast, for example, with the conclusions of the most recent scientific studies on such matters as integrated assessment models for calculating the social costs of carbon. Such evidence based information is articulated for instance in the internationally respected and peer-reviewed journal, Nature, reaffirming that if questions of human mortality are taken into account, the socal price of carbon should be pegged closer to 258 USD per ton. Abandon Negligent Provisos on Indirect Support for Nuclear Energy We most particularly urge revisions of paragraph 78 of the updated Working Paper, which directs ADB staff and consultants towards providing technical advice to DMC governments on new opportunities for deploying nuclear technologies in the power sector. Even if the ADB refrains from financing nuclear projects directly, providing such advice would clearly saddle the Bank’s management with onerous liabilities -- given the reality that developing member countries are the most affected by extreme climate-related crises of rising sea levels and extreme weather events, not to mention several geological fault lines. Engaging with nuclear supply chains has no place in a just, inclusive, green transition process and should not be branded as a realistically affordable energy solution fit for propelling regional populations into a climate resilient future. One only need consider the devastation caused by recent nuclear spills and accidents as well as unresolved questions of safely disposing of/storing nuclear waste -- not to mention the irreparable social and ecological harms resulting from uranium mining -- to comprehend the costs to human life and ecosystems associated with giving such advice. We therefore categorically urge the ADB management to withdraw this paragraph from any final version of the 2021 Energy Policy advanced for approval by the Board of Directors. Relegate Large-Scale Dams to the Past, Support Free-Flowing Rivers and Redress We remain concerned that the provisions related to large-scale hydropower (para. 69) fail to be informed by up-to-date scientific, economic or ecologically sound data. For example, there are no assurances that outstanding problems related to hydropower projects in not only the same river basin, but also within other nearby watersheds, are already addressed before investment in new dams move forward (including as related to local grievances of upstream and downstream communities). Nor are there any provisions related to supporting communities when downstream zones traverse national borders or conflict zones. In this regard, we note there are no requirements established by the ADB to ensure all concerned government bodies (including those in neighbouring countries where rivers are part of transboundary watershed systems) are in a position to fully carry out operational management duties with due diligence. Accordingly, there remains a lack of assurances that such projects will be carried out with the full awareness of -- and public acceptance explicitly granted by -- affected communities. Further, we note the failure to take into account life-cycle greenhouse gas emissions as well as other relative economic, social or environmental costs, or to consider the realities of changing water levels and hydrologies in the context of fluctuating rainfall and river flow. In effect, rather than bolstering finances for aging and dysfunctional dam infrastructure, the Bank now has the opportunity to acknowledge such historical legacies as no longer fit for purpose, instead supporting locally-managed dam removal initiatives, enabling river restoration and riparian resilience in line with the priorities of Agenda 2030 and the SDGs. Crucially, for member organizations of the NGO Forum on the ADB allied with dam-affected communities, the association of large hydropower with the notion of sustainable development belies the dispossession and sacrificing of critical ecologies depended upon by young and older generations alike. Abandon Investments in New Waste-to-Energy, Co-Fired Fossil/ Biomass and Large-Scale Biomass Projects We note that the provisions related to waste-to-energy (WTE) in paragraph 71 still fail to reflect critical concerns relayed to ADB management by our member organizations and allies in the first round of consultations. Firstly, WTE is costly to establish and to operate -- most especially with the put-or-pay contracts through which public authorities are required to supply operating sites with voluminous quantities of waste as contractually agreed upon -- or risk becoming indebted. Secondly, documentation from WTE sites across the region, including in high-income Asian countries with stricter environmental and health regulations, not only reveal serious challenges in managing hazardous and toxic by-products, but also costly impacts on local environmental health and well-being, most particularly in relation to the livelihoods of waste workers. And thirdly, by categorically suggesting waste is a renewable source of energy (paragraph 77), the ADB fails to consider the IPCC Report on Renewable Energy Sources and Climate Change Mitigation (2011) that suggests only organic components of municipal solid waste[3] should be considered as renewable. Indeed, the ADB’s Working Paper fails to provide clear parameters on the category of waste, thereby opening the door to fossil-fuel based waste streams, such as plastics, to be considered ‘renewable’. Although the Working Paper suggests mitigating environmental and social impacts of WTE through the adoption of “best internationally available technologies'' in the design and operation of such projects, no references are made to international obligations and standards relevant to mitigating the risks from WTE, such as the Stockholm Convention on Persistent Organic Pollutants, risking that voluntary corporate policies will be applied to address critical impacts of these projects on surrounding communities and ecosystems. As noted below, it is further concerning that the current iteration of the Working Paper omits any reference to a guidance note on waste-to-energy that would provide clarity on risk frameworks and implementation arrangements being considered for such investments. On the issue of biomass, we wish to raise the concern that the provisions in the Working Paper do not rule out support for co-firing fossil fuel based power projects with biomass, converting large-scale fossil fuel power projects to ones entirely reliant on biomass firing, or investments in new large-scale biomass generators. The lack of clarity on feedstock materials considered in the Working Paper significantly keeps options open for reliance on woody biomass from natural forests and/or plantations -- accordingly failing to take into consideration lifecycle associated greenhouse gas emissions, while also risking the undermining of climate resilience, exacerbating conflicts over land and forest resources, and threatening the livelihoods of forest dependent communities. We therefore urge the ADB to develop more stringent language in regards to financing biomass projects, and to explicitly integrate language that recognizes the critical need to avoid spurring onwards the range of ecological, social and economic problems often associated with such facilities. Ensure Dispersed Sub-Projects Are Subjected to Strict Requirements for Public Disclosure, Robust Adherence to ADB Safeguards & Aligning with a 1.5C Trajectory We are further concerned by the wide range of investments and projects, including those which are coal, oil and gas-related, that may currently be captured within the scope of the wording related to financial intermediaries, as outlined in paragraph 108 (i.e. that the “ADB will use financial intermediation as an approach to supporting dispersed subprojects...for rural electrification, clean cooking, island energy supply, demand-side energy efficiency programs, and other programs that are not amenable to project loans or other investment modalities”). First and foremost, we take note there are no stated requirements for dispersed sub-projects to be disclosed from the outset of the project cycle, meaning civil society groups and affected communities will be systematically left without the key information required to understand which companies and project sites are being financed via this modality, and what institutions should be accordingly held accountable when grievances arise. Alarmingly, there are no accompanying provisions to explain how -- or indeed what -- assurances are in place for verifying that such dispersed projects will strictly adhere to the ADB’s safeguard policy. For example, it is not clear how communities impacted by sub-projects financed via financial intermediary modalities will have opportunities to engage in robust, meaningful consultations or be positioned to submit concerns via the bank’s own accountability mechanism and/or project-level grievance procedures. In relation to how/if sub-projects will be Paris-aligned and comply with a 1.5C pathway, we question why the ADB has explicitly rejected the application of evidence-based and easily available screening tools used by other financial institutions to minimize investment exposure to fossil fuels (such as the Global Coal Exit List). In this regard, it remains significantly concerning for example, that provisions within the Working Paper referencing oil and gas investments clearly imply reliance on financial intermediation -- without any clarification whatsoever outlining parameters for Paris-alignment or safeguard compliance. We therefore reiterate our recommendations that the final language of the 2021 Energy Policy must require unequivocally binding standards on FIs to ensure these matters are duly taken into account. Towards Meaningful Just Transitions, Genuinely Inclusive Planning and People-Centred Decentralized Access Although we acknowledge that the ADB is taking an initial step towards investing in a “just transition,” the NGO Forum and our members, including those affiliated to workers’ support groups and alliances, street vendors, transport associations, local farming and peasant cooperatives, fisherfolk movements, Indigenous Peoples’ networks, women’s organizations, youth groups and differently-abled peoples’ alliances, remain alarmed by the vague, superficial referencing surrounding this concept in the ADB’s “Energy Policy Working Paper”. In particular, it fails to articulate any sense of meaningful accountability towards the concerns and demands as expressed by independent workers’ unions, associations, co-operatives and movements in-country, on site and/or in the respective local sectors, fully in line with core ILO conventions and other international rights-based standards. Nor does it take into account how planning and implementation of a just transition would happen with full, free, prior and informed consent of Indigenous Peoples and ethnic minorities in places where ancestral lands and territories are impacted, or of locally affected communities of fisherfolk and subsistence farmers, ensuring land rehabilitation, access and reform is prioritized alongside the closure of fossil fuel dependent industries. From our perspective, green, just and inclusive transitions must be grounded in the different contexts and realities across the region[4], but nevertheless ensure that matters related to peoples’ access to energy and power generation be wrested in the hands of the public, not the private sector, socially managed and operated at different levels through meaningful decision-making structures, including locally by communities.[5] It must also prioritize decentralized systems as well as a socially and ecologically just transformation towards real-zero emissions and extraction of fossil fuels. It is in this light that we continue to be concerned by the current lack of substantive language in the Energy Policy Working Paper’s references to planning for a ‘just transition’. Undisclosed/Unreferenced Guidance Notes The NGO Forum on ADB has duly taken note of the provisions related to guidance notes on large hydropower and gas (paragraph 115), and remains accordingly concerned that no draft language has been made publicly accessible. This lack of disclosure means most importantly, that civil society organizations and networks are left without required information to have informed dialogues on the parameters of the gas and hydropower-related projects, investments as well as policy directions. In addition, we understand there is a directive on waste-to-energy in writing that will be/is being issued to staff in preparation for policy implementation purposes -- yet the Working Paper lacks any mention of such a document. Being left in the dark in this regard raises serious questions of accountability, as it means both affected communities and their allies are left without options to know what specific standards staff are guided by, whether -- or not -- they will be called upon to uphold internationally accepted agreements and standards intended to avert associated social and environmental damage, or what -- if any -- meaningful channels exist by which to raise concerns. Address Needs of Civil Society Across the Region Finally, we wish to express our particular dismay that despite requests made by civil society groups in regards to the translating the initial draft policy released back in May 2021, this Working Paper has yet to be disclosed in any major regional languages (including but not limited to Russian, Hindi, Bahasa, Chinese and Thai) nor has it been made available with due regard for people with vision impairment. In our view, this is unacceptable, as it creates serious institutional barriers for civil society groups made up of populations across Central, South and Southeast Asia to provide meaningful, informed comments within the short two week window of time provided (Aug. 17th-31st) by SDCC. Conclusions In conclusion, we thank you for considering the above issues, which we hope will lead to vigorous dialogue and questions being raised as the policy moves forward in its final articulation to the ADB Board of Directors. Endorsed by the following organizations - 11.11.11 350 Pilipinas, Philippines 350.org Asia, Regional 3s Rivers Protection Network (3spn), Cambodia Aid/Watch, Australia Aksi! For Gender, Social And Ecological Justice, Indonesia Asian Peoples Movement On Debt And Development, Asia - Regional Armenian Women for Health and Healthy Environment (AWHHE) Bangladesh Working Group On External Debt (BWGED), Bangladesh Bindu, Bangladesh Center For Energy, Ecology, And Development, Philippines Center For Environment And Participatory Research - CEPR, Bangladesh Centre For Environmental Justice, Sri Lanka Centre For Human Rights And Development (CHRD), Mongolia Citizens Forum For Mangalore Development, India CLEAN (Coastal Livelihood And Environmental Action Network), Bangladesh Climate Watch Thailand, Thailand Coast Foundation, Bangladesh Committee For The Abolition Of Third World Debt (CADTM), India Community Empowerment And Social Justice Network (CEMSOJ), Nepal Community Resource Centre, Thailand Consumer Ngo, Mongolia Culture And Environment Preservation Association, Cambodia Eco-Social Development Organization(ESDO), Bangladesh Eden Mohila College, Bangladesh Environics Trust, India Equitable Cambodia, Cambodia Europe Solidaire Sans Frontières (ESSF), France FIAN Sri Lanka, Sri Lanka Fisheries Action Coalition Team, Cambodia Freedom From Debt Coalition, Philippines Fresh Eyes, United Kingdom Gender Action, USA Global Alliance for Incinerator Alternatives (GAIA), Asia Pacific Growthwatch, India Individual, India Initiative for Right View, Bangladesh Indian Social Action Forum (INSAF), India Indian Solidarity Committee (INSOCO), India International Association of People's Lawyers, Australia International Rivers, US Joint Vountary Action For Legal Alternatives - JVALA, India Karavali Karnataka Janabhivriddhi Vedike, India Karmojibi Nari, Bangladesh KruHa, Indonesia Lumière Synergie Pour Le Développement, Senegal Mekong Community Institute Association, Thailand Mekong Watch, Japan Movement For Advancing Understanding Of Sustainability And Mutuality (MAUSAM), India My Village (MVI) Organization, Cambodia Nadi Ghati Morcha, India Nash Vek, Kyrgyzstan National Adivasi Alliance, India NGO Forum on Cambodia, Cambodia Oil Change International, United States Pakistan Fisher Folk Forum, Pakistan Pakistan Kissan Rabita Committee, Pakistan Progressive Plantation Workers Union (PPPWU), India Public Services International, India Recourse, Netherlands Rivers Without Boundaries Coalition, Mongolia Sangatya, India Songshoptaque, Bangladesh Sri Lanka Nature Group, Sri Lanka Stiftung Asienhaus, Germany Umeedenoo, Pakistan University Of Dhaka, Bangladesh Unmochon, Bangladesh Urgewald, Germany Womanhealth, Philippines Youth Group On Protection Of Environment, Tajikistan Annex I: Referenced Excerpts of Specific Paragraphs of the ADB Energy Policy Working Paper On Carbon pricing and markets (para 48) ADB will consider the social cost of carbon across all energy projects. A review of the empirical estimates of the global social cost of carbon reported by the Intergovernmental Panel on Climate Change suggests a unit value of $43.20 per ton of CO2 equivalent (2020 dollar), to be increased by 2% annually in real terms to allow for the potentially increasing marginal damage of global warming over time.17 This unit value can be used to estimate the value of avoided GHG emissions for projects that reduce emissions and the cost in damage created for projects that increase emissions. The unit value will be revised in the future as more and newer estimates of damages caused by climate change become available. On Large-scale Hydropower (para. 69) [...] ADB will only support large hydropower schemes that have been evaluated in a robust environmental and social assessment, including an ecologically led e-flow assessment, and after consideration of alternative locations and designs. This assessment must be based on up-to-date environmental and social baseline data, with particular attention paid to the cumulative impacts of the project on the aquatic and terrestrial ecosystem and on any affected communities. Independent environmental, social, and dam safety experts shall be involved from the start in a project's design and implementation. For all hydro plants, particular attention will be paid to ensuring an eco-sensitive design that encompasses an ecologically led environmental flow assessment and the inclusion of fish passes, ecological offsets, compensation for land acquisition and resettlement, and livelihood restoration in accordance with ADB’s safeguard policy as well as international good practice for large hydropower projects. In view of the number of aging hydropower plants in the Asia and Pacific region and the associated risks, ADB will support DMCs in rehabilitating or replacing structures as well as electrical, mechanical, and electromechanical equipment. On Waste-to-energy (para. 71, 77) ADB will support waste-to-energy investments for heat or electricity, provided that the feedstock for combustion results from a prudent order of waste management priorities….ADB will promote projects that consider holistically the order of priorities—first reducing waste generation, then exploiting the options for reusing and recycling materials, then using waste to generate energy or basic materials (such as those used in civil construction), followed by landfilling as the last option...The potential environmental and social impacts of waste-to-energy investments will be managed by using the best internationally available technologies in the design and operation of such projects (71). Liquid and gaseous fuels represent another important avenue for providing a stable energy supply and storing energy from various renewable sources, including sustainably sourced biomass, waste, and variable renewable electricity. (77) On Oil (para. 73) [...] ADB may support projects with hybrid electricity solutions involving petroleum-based backup systems along with renewable energy for isolated grids, remote areas, and in fragile and conflict-affected situations [….] ADB may, however, continue providing guarantees and loans to partner banks in DMCs that support the international trade and supply chains, which may involve trading in oil to support the immediate flows required to keep economies running in a few countries where there is little private sector support for such import risk. This support may be extended until coordination between multilateral development banks produces a shared approach to trade and supply chain financing in line with the Paris Agreement. On Coal (para. 74) ADB … confirms its current practice of not financing new coal-based capacity for power and heat. ADB will not participate in investments to modernize, upgrade, or renovate coal facilities that will extend the life of existing coal-fired power and heating capacity. ADB will support DMCs in planning for the early retirement of coal-based power plants and in enhancing power generation dispatch regimes to discourage the use of high-emitting, inefficient coal-fired power plants. It will also support the decommissioning of coal-fired power plants and site redevelopment for new economic activity...In providing support for the phasing-out of coal, ADB will also help create new jobs in cooperation with the local communities and stakeholders. Comprehensive planning for a just transition will support ADB in these operations (para. 81). On Gas (para. 75, 102) [….] ADB may also finance investments in natural gas infrastructure—including gas T&D pipelines, liquefied natural gas terminals, and storage facilities—and natural gas-based end-use facilities subject to a set of screening criteria consistent with the Paris Agreement. ADB’s support to a natural gas-based power generation project will be conditional on evidence that the project reduces emissions by directly displacing other fossil fuel-based thermal power capacity or that it results in a lower grid emission factor estimated as an average over its operational life. Natural gas investments may also be supported if they serve space heating, cooling, domestic demand, industrial energy applications, or distributed electricity generation to improve energy access, provided it is demonstrated that the projects displace more polluting fuels such as coal, coal-based town gas, or oil….(para 75) *Also: “ADB will promote regional cooperation through policy dialogue, knowledge sharing, and investments in electricity and natural gas network infrastructure and cross-border energy trading…” (para 102) On Carbon Capture (para. 76, 77) ADB will support carbon capture, use, and storage technologies for power plants and industries. ADB will continue to provide capacity development, technical assistance, and regulatory advice in support of DMC programs to identify and remove hurdles to the development, demonstration, and commercialization of CCUS systems. ADB recognizes the crucial role of these technologies in the long term, particularly for industrial activities that are difficult to decarbonize, and will help DMCs advance their capacity to plan for and deploy such systems, including through financing for CCUS facilities. ADB will not finance CCUS in the context of enhanced oil recovery. (p. 76) In the future, [...] synthetic fuels based on sustainable hydrogen and carbon capture, may also provide alternatives that can replace the use of fossil fuels in various industries, while at the same time not undermining food security. (p. 77) On Biogas (para. 77) ADB will support DMCs in developing and using advanced biofuels; this includes helping them build larger, centralized biogas units that produce methane for power generation, transport, or for sale to the natural gas network. On Nuclear (para 78) ...ADB recognizes the role of nuclear energy in the low-carbon transition given its ability to provide low-carbon baseload electricity, and will include nuclear analysis in the development of long-term energy plans and climate strategies, as appropriate. However, ADB will not finance investments in nuclear power given the many barriers to its deployment, including risks related to nuclear proliferation, waste management and safety issues On Just Transition (para 81) The transition to a carbon-neutral economy will affect every aspect of how we produce goods and provide services, particularly in conventional energy industries. It will considerably affect workers and communities, as well as future jobs and demand for skills. Planning for a just transition will be critical in managing this process; the aim is to mitigate negative socioeconomic impacts and increase opportunities associated with the transition; support affected workers and communities; and enhance access to sustainable, inclusive, and resilient livelihoods for all. ADB will work with DMCs to support such planning in a way that involves all relevant stakeholders and affected groups at all stages of the energy transition. On guidance notes (para 115) ADB’s Energy Sector Group will prepare staff guidance on the screening criteria for projects involving natural gas and large hydropower plants [1] ​In this regard, the NGO Forum on ADB looks to the guiding note on "Principles for Paris Aligned Institutions" endorsed by civil society organizations and social movement alliances worldwide, asserting that ​"Financial institutions (FIs​)​ that commit to ‘Paris alignment’ must also commit to aligning with the Paris Agreement’s goal of limiting global warming to 1.5°C while respecting all human rights and the specific rights of Indigenous Peoples.​"​ [2] Legally binding regulations holding companies accountable for violations of the rights of current (and future) generations are exemplified by Germany’s supply chain laws and other similar due diligence policies adopted by governments in Europe and beyond. [3] From the perspective of NGO Forum on ADB’s member organizations, waste-to-energy projects reliant on food waste (biogas) should - without exception - follow a strict waste hierarchy (i.e. ensuring reduction, re-distristribution, conversion into animal feed, and composting as priorities), and should be operated at a decentralized level, averting associated emissions derived from long-distance hauling. [4] For a more context-specific overview of what inclusive, meaningful, sustainable and just transitions across Asia could look like, see the recent paper jointly published by Freedom From Debt Coalition, NGO Forum on ADB and Fair Finance Asia, “Making a Green New Deal Work for the Working People of Asia,” by Professor R. Ofreneo (2021). [5] For further articulation of the concept of “transformative energy”, see the joint publication by Centre for Energy, Ecology and Development (CEED) Philippines and the NGO Forum on ADB, “Switching On” (2021). Download PDF here.

Manila, Philippines - One week before the Asian Development Bank’s Board of Directors deliberate on the proposed 2021 Energy Policy, civil society organizations from Central, South, Southeast and East Asia have come together to denounce the policy as unequivocally climate mis-aligned. They warn that this policy undermines not only the latest climate science and efforts to limit the rise in global temperature to 1.5C, but also the ecosystems our very survival depend upon, exacerbating social, economic and climate injustices and plunging millions into further livelihood precarity. Before the final decision on approving the 2021 Energy Policy (“R-Paper”) is made by the representatives of the ADB’s shareholding governments, civil society groups urge them to go back to the drawing board, reconsidering several key provisions of the policy. According to a report released by the ADB’s own Independent Evaluation Department in recent weeks, the Bank’s “climate outcomes are not well tracked, investments in adaptation have not achieved their targets, the portfolio and pipeline lack ambition, and strategic and institutional arrangements are not commensurate with the challenges to enable ADB to lead on climate action.” The report recommends the development of “clear steps on how ADB will support DMCs [Developing Member Countries] to transition away from fossil fuels and super-pollutants”. Indeed, information published in the most recent assessment of the Intergovernmental Panel on Climate Change (AR6: August 2021) leaves no doubt that fossil fuels must be left in the ground to stay within the parameters of a 1.5C temperature rise. Grounding their concerns in the lived realities of people affected by ADB financed energy infrastructure, the civil society groups are together calling into question ADB’s claims to be the “Climate Bank” of Asia and the Pacific. They note that the revised 2021 Energy Policy will enable the ADB to ramp up financing for resource-intensive projects including: Fossil gas projects, including LNG terminals (para 76), and “where necessary”, oil-based power systems, specifically in isolated and remote areas, and fragile and conflict-affected situations (para 74) Infrastructure for power connectivity, inclusive of pipelines for oil and gas but also transmission lines connected to fossil fuel based facilities (potentially inclusive of coal, oil or gas) Carbon capture and storage facilities for power plants, LNG import facilities, and other fossil fuel reliant industries as well as industrial-scale blue hydrogen projects and infrastructure (reliant on fossil gas burning) (Paras 73, 77, 78) Large-scale hydropower projects – without any requirement for cumulative impact assessments or involvement of independent environmental, social, and dam safety experts (para. 70) Large-scale waste to energy projects for heating or electricity purposes (para. 71) and large-scale biogas projects that feed into current gas networks (para. 78) In addition, these groups have united to condemn the policy as lacking in: Any concrete commitments to meet the electrification needs of last-mile communities (referenced once in the policy’s 119 paragraphs) Any rigorous screening criteria for projects financed as part of the Bank’s climate portfolio (e.g. no incorporation of conditions to ensure investments are not associated with facilitating further build up of coal, oil or gas) Greater commitments to renewable energy development, especially for hard-to-decarbonize sectors such as industrial processes, heating, cooling, and cooking Any time-bound commitment to align equity investments, loans and direct project financing with the provisions and objectives of the Paris Climate Accord Any clear information about the rate of social cost of carbon being applied, the annual scaling rate, and how calculations will align with international best practices Any clear reference to provide assurances that support for just transition planning in developing member countries would be rolled out in accordance with ILO and other international human rights conventions, including for communities most affected by the ADB’s own operations Acknowledgement of energy as public common good, ensuring the processes of a just transition are grounded in local realities, inclusive and sustainable, fully accountable to people not merely shareholders Clarity on whether accompanying guidance notes will be made publicly available, let alone subject to a process of robust public consultation Although the 2021 Energy Policy will be reviewed and revised again within the coming five years, the injustices that can be wrought on communities and the damage to ecosystems over this time cannot be underestimated, civil society groups say. It is with this in mind that they urge the ADB’s Board to take heed, recognizing their responsibilities to the people of the developing member countries; those who are at the frontlines of the climate crisis. Civil society representatives released the following statements in reaction to the revised 2021 Energy Policy ahead of the Board of Directors scheduled vote on 20th October: Rayyan Hassan, of the NGO Forum on ADB (Regional): “The ADB’s R paper has opened the doors for oil, gas, incinerators and large hydropower projects. The recent pronouncement from the ADB that they are Asia’s ‘climate bank’ is directly misleading. Instead, their financing portfolio is effectively set to derail the region from the global effort to meet Paris Agreement commitments as per the recommendations of the most recent assessments of the Intergovernmental Panel on Climate Change to keep as close as possible to a 1.5C trajectory. Post-policy approval, we urge Board Members to scrutinize all energy investments against international climate ambitions, heeding the concerns of communities affected by the very projects they finance.” Hemantha Withanage from the Friends of the Earth International and Center for Environmental Justice in Sri Lanka: “While I commend the ADB for committing to deliver climate financing to its developing member countries (DMCs) amounting to $100 billion from 2019–2030, we cannot understand why ADB continues to support dirty energy including LNG and waste-to-energy which contribute to climate change. The new ADB energy policy still keeps provisions under section 76 to support LNG and finance investments in natural gas infrastructure—including gas T&D pipelines, LNG terminals, and storage facilities— and natural gas-based end-use etc. As Asia and the Pacific is more vulnerable to climate change with the highest number of climate refugees, if ADB wants to claim itself as the ‘climate bank’ of the region, we demand ADB to support only renewables and just energy transitions.” Lidy Nacpil of the Asian Peoples' Movement on Debt and Development (Regional): “Fossil fuels, harmful projects and unsustainable and illegitimate debts have no place in a prosperous, inclusive, resilient, and sustainable Asia that the Asian Development Bank claims to be working for. The ADB must stop all financing and support for fossil fuels, dangerous and false solutions to the climate crisis, and other harmful projects and immediately cancel outstanding debts connected with fossil fuel projects or convert these to grants for renewable energy.” Toshi Doi from Mekong Watch (Regional): “I contest ADB’s claim to be a ‘climate bank’ as its new Energy Policy still attempts to support large hydro. Large hydro is not clean nor sustainable and it reduces climate change resilience because it devastates river ecology and threatens natural resources, most importantly fish, which lives and livelihoods of local communities, including women, children, and elderlies, critically rely on. Large reservoirs also emit methane. ADB should learn how severely its Greater Mekong Subregion (GMS) program, by promoting large hydro, has affected the Mekong River and its riverine communities, and exclude any support for large hydro from its energy policy.” Yobel Novian Putra from the Global Alliance for Incinerator Alternatives-Asia Pacific (regional): “The ADB should be ashamed of their outright greenwashing effort in classifying Waste-to-Energy (WtE) incinerators as part of green bonds, blue bonds, and climate financing projects. There are at least 8 WtE projects that ADB classified as climate mitigating activities. Waste incineration is a highly carbon-intensive process which undermines our climate targets -- especially when it burns plastic which is another form of fossil fuel. It is not part of a circular economy and discourages waste prevention and recycling. The European Union has excluded WtE incineration from its Just Transition Fund, Regional Development, and Cohesion Fund. It is frustrating to see that waste is still classified as a renewable energy source in the R-Paper, contradicting the IPCC’s definition of renewable energy sources.” Titi Soentoro from Aksi! For Gender, Social and Ecological Justice in Indonesia: First of all, I would like to condemn the promotion of geothermal in the new ADB Energy Policy. This promotion is a real threat for people in volcanic countries, like Indonesia for example, that are targeted heavily for geothermal extraction. ADB, again, disrespects the suffering of the peoples and environment from geothermal extraction. There are many aspirations in this new ADB Energy Policy regarding women: women as key agents of change in the energy transition, promoting and supporting women’s participation in energy policy- and decision-making, women’s entrepreneurship to expand energy access and address energy poverty, and so on. Based on the experiences in monitoring ADB's projects, the usual practice is that this aspiration would stay as such. It is a misconception that gender inequality in the energy context is because of a lack of women's access to clean and modern energy services. The extraction of energy sources, like geothermal, biofuel, coal, among others that triggered the loss of livelihoods and natural resources, and the system that controls the energy business, are the causes of gender inequality in the energy sector. Moreover, ADB's induced strategy of privatization including electricity and water has created the structural barriers for women's lack of energy access. The new Energy Policy shows that ADB failed to recognize this. Hence, how will the Energy Policy dismantle its own created barriers? The new Energy Policy states that it will consult women meaningfully, conduct gender analysis, and collect sex-disaggregated data to ensure that gender is mainstreamed throughout the project cycle (para 64). ADB fails to apply gender considerations in the Safeguard Policy Statement (SPS) 2009 that precisely about the participation of women and gender impacts and risk assessment. So, how will this new Energy Policy ensure that paragraph 64 would be implemented? The international communities agree to leave the extractive high carbon path and go to the low carbon path. However, without structural change of the extractive mode "business as usual", the low carbon development path will have the same systematic exploitation and oppression. The ADB's new Energy Policy does not show a transition from this mode of business as usual. Ikrom Mamadov from the Youth Group on Protection of the Environment in Tajikistan: “The ADB's Energy Policy should consider all possible factors that may negatively affect countries in Central Asia and the Caucasus. In particular, the policy should ensure a just transition and offer specific conditions of support that ensure detailed consideration of the local people, since they are the ones who may suffer the most. The ADB has the opportunity to strengthen control over the implementation of all international norms and requirements, reducing environmental impacts in the process of project implementation while ensuring a just transition to alternative energy sources. Preventing negative impacts on the environment is equal to the protection of people's interests. We urge the ADB Board to reconsider approving the Energy Policy until it is revised to explicitly include more detailed assurances of a robust implementation mechanism, whereby everyone could get an answer to the question of how their financing will be used to support a just transition in our communities.” Avril De Torres from the Center for Energy, Ecology, and Development (CEED) in the Philippines: "For over a decade, ADB was guided by an energy policy that catapulted developing countries like the Philippines to fossil fuel dependence and the world to exacerbating climate change. Should the new policy be approved as is, the bank is setting itself up to repeat history. ADB had a promising start with the declaration of a no-coal policy, yet is now leaving the door open for fossil gas against the backdrop of record high fossil gas prices and massive fossil gas expansion in Asia. It seems keen on maintaining a dirty energy legacy but we cannot allow it to consign climate-vulnerable Asia-Pacific to catastrophe when it is well-equipped to lead genuine energy transformation by supporting a rapid and sustainable expansion of renewables among its member countries."

Civil society groups across South, Southeast and Central Asia are raising the alarm as the Asian Development Bank (ADB) gears up to announce a new Energy Policy that — unless recalibrated — will fail to reflect the realities of climate science and local peoples’ burning concerns. On September 6th, the ADB’s Board of Directors is set to discuss the proposed framework that will guide the Bank’s energy portfolio for at least the next five years. Just last month, the most recent IPCC report (AR6) was released; a so called “code red for humanity” that issues a stark warning: coal, oil and gas must be left in the ground, with no new infrastructure built to extract or burn these fuels if we are to have a chance at survival. Civil society groups note with concern the ADB is prepared to continue financing not only fossil fuel dependent projects, but also large-scale hydropower and waste-to-energy projects that simply have no role in a forward looking agenda for a just, inclusive and sustainable transition in the region. In effect, the ADB’s publicly posted “Energy Policy Working Paper” critically fails to take into account the latest climate science, undermining – rather than bolstering – global efforts to limit global heating to 1.5C. The Working Paper has been hastily rushed to the Board of Directors for approval with only a two week window for public review and input (August 16th – 31st), meaning non-English speaking communities with little or no access to the internet — the very people who are impacted by the ADB’s projects — are effectively excluded from opportunities to give any meaningful comments on the draft. As Rayyan Hassan, executive director of NGO Forum on ADB elaborated: “The Working Paper of the ADB’s Energy Policy Review was released in English as late as 16 August on the ADB website. While the coal exit language has been retained, loopholes remain. There is nothing stopping the ADB from supporting investments in coal via financial intermediary lending, or in transport and connectivity infrastructure that will enable further coal trade and extraction.” He also added that the Working Paper fails to incorporate the urgency of the IPCC AR6 report, and does not apply stringent or time-bound criteria on ending support for further expansion of fossil fuel infrastructure, most especially for new gas-dependent operations. “For a 54-year old MDB, we expect the ADB to immediately halt its financing for fossil fuels, helping to shift the region towards renewable energy especially through solar and wind technologies. The ADB must ensure adequate considerations are made to the climate emergency as per the IPCC report and update the draft accordingly. The ADB has to emerge from this review with an Energy Policy anchored in support for transformative and renewable energy in line with a 1.5 degree target, and it has to act now,” Hassan added. The Draft Energy Policy veers dangerously towards promoting projects that will lock some of the most climate vulnerable countries on the planet into a future dependent on large-scale power projects that threaten peoples’ livelihoods and health, while emitting heavy methane and other greenhouse gas emissions. As Avril De Torres from Center for Energy, Ecology and Development (CEED) Philippines explained: “A 1.5°C-aligned transition is an imperative for climate-vulnerable Asia, and the IPCC made clear what this looks like: a swift end to our dependence on all fossil fuels, not just coal. ADB seems to be deaf to the IPCC’s climate code red, with its Working Paper still bent on churning more carbon and methane through dirty energy, especially fossil gas, and false solutions like carbon capture. We also hope the ADB clarifies its coal buy-out scheme in the Philippines and neighboring countries, and how this fits – or contradicts – its no coal policy”. She continued: “As nations that stand to lose the most if we fail to bring global temperature rise back down to no more than 1.5°C by the end of this century, we cannot allow the ADB Board to approve a Working Paper that is nowhere near the ambition needed to address the climate crisis in this most critical decade.” Nora Sausmikat from Urgewald, based in Germany, urged the ADB to close all loopholes for facilitating fossil fuel extraction and infrastructure expansion, affirming that: “Only green hydrogen produced with renewable energy is sustainable and reduces carbon emissions.” She further noted that: “True climate solutions cannot include any advice for nuclear energy. Looking at the whole project cycle from uranium mining to waste disposal, this technology is in no way climate friendly, but dangerous and costly.” As Petra Kjell from UK-based Recourse explained: “Since its last Energy Policy was implemented in 2009, ADB has invested over $6 billion in financial intermediaries such as private equity funds and banks. It is imperative that ADB publish the name, sector and location of all high and medium risk projects it supports through FIs. Otherwise, no one will be able to track and monitor ADB’s fossil fuel commitments. Without transparency reforms, we will simply have to believe ADB that no FI money is ending up supporting fossil fuels.” Hasan Mehedi of the Coastal Livelihood and Environmental Action Network affirmed: “In the Energy Policy Working Paper, the ADB did not set any deadlines for ending fossil fuel investments. ADB is not merely a bank, but a policy influencer in relation to member countries in Asia and the Pacific. If ADB doesn’t set a deadline for fossil fuel investments and support achieving 100% renewables in the region, how will the member countries achieve it? Any further financing of fossil fuel projects will even jeopardize goals to achieve net zero emissions by 2050 – let alone real zero. ADB has to stop offering financing for fossil fuels, including fossil gas, now, and that should be reflected in their new Energy Policy.” Civil society groups are also questioning why the ADB’s Working Paper explicitly suggests support will be extended to Waste-to-Energy projects, when better, cleaner and locally appropriate energy solutions exist. According to Yobel Putra of the Global Alliance for Incinerator Alternatives – Asia Pacific: “Waste-to-Energy is waste incineration in disguise. The bank has admitted that the energy generated from this burning technology is insignificant compared to other energy sources. In fact, it will only heat up our planet and spew toxic pollutants which will accumulate in our food chain for a very long time. With its heavy reliance on burning fossil-based plastic, investing in incineration is clearly not Paris-aligned. It is more carbon intensive than coal-fired power plants.. It also hinders measures on waste reduction, reuse, recycling, and composting”. The suggestion in the Working Paper to finance large-scale biomass operations has similarly raised concerns among advocates across the region. As Peg Putt of the Biomass Working Group’s Environmental Paper Network explained: “Large-scale energy generation from forest and plantation grown biomass is a damaging false solution that the ADB should exclude from supporting as part of a low carbon transition. Logging and burning forest wood immediately releases carbon emissions on par with coal, harms forests and depletes their ability to draw down carbon, whilst it also marginalises forest communities”. NGO Forum on ADB members and allies are also alarmed by the provisions related to large-scale hydropower. Asserted Gary Lee of International Rivers: “For decades, large dams have driven the displacement of millions worldwide, while emitting vast quantities of methane – one of the worst greenhouse gases that the IPCC is calling for drastically reducing. The science and historical evidence is clear–if we want to tackle the climate and biodiversity crisis, increase resiliency and food security, and protect the rights of people. The ADB’s energy policy must prohibit financing for new large hydropower projects.” In practical terms, the NGO Forum on ADB members across the region have also repeatedly raised concerns that the way in which the roll out of the Energy Policy review has taken place has not provided a meaningful basis for open, accessible consultations with communities affected by the Bank’s own project investments. From the perspective of Vidya Dinker of the Indian Social Action Forum/GrowthWatch: “The ADB seems to have played an elaborate hoax on us. They kept us hooked with coming-soon announcements of a robust review of their energy policy. In an expression of good faith, despite the draft paper unveiled in May being only in English, CSOs struggled but extensively engaged with the bank on it. Why then do we have the same issues and some more, with this 2nd and last draft before us? Four months of ‘consultations’ that ignored community voices, even basic foundational asks like translations into 5-6 major Asian languages to facilitate meaningful consultation, continued subterfuge on guidance notes, marks this as an opaque and hopelessly meaningless exercise.” It is in this context that civil society groups have taken a stand to demand the ADB adopt a new Energy Policy that is in line with what the science and times demand of us, underscoring that better energy options exist for the region, that are locally appropriate, decentralized to meet the needs of urban and rural people alike, and Paris-aligned. Watch the press conference here.

In the short window of time left before the Asian Development Bank's (ADB)'s Board of Directors deliberate on a new Energy Policy to guide their investments, NGO Forum on ADB is calling a press conference to make sure that the Bank hears and understands the demands of CSOs and impacted communities -- to recalibrate the draft energy policy, aligning it with climate science and meaningful, inclusive just transition. We hope that you can join us, the event will be on 2 September 2021, Thursday, at the following times - 2:00 PM Manila | 7:00 AM London | 8:00 AM Berlin 11:30 AM New Delhi | 12:00 NN Dhaka | 1:00 PM Bangkok The press conference will also be live-streamed via NGO Forum on ADB's Facebook page. You may download the speaker's profile here. You can read the Forum's Critique of the ADB’s 2021 Energy Policy Working Paper here.

Download the research here.

An emergency online press briefing by Growthwatch India, took place on 28 June 2021 after finding out that the Karnataka Forest Department had issued tree felling permissions within a tiger reserve to the South Western Railways on April 28th and 30th 2021, amidst the pandemic and second lockdown. The project is an interstate railway track doubling project from Hospet in Karnataka to Vasco in Goa. The activity involves diversion of 10.57 ha protected area forest land in Karnataka (including the Kali Tiger Reserve) and another 113.85 ha in Goa through the Mollem National Park. Phase I of this project for a length of 245 kms in Karnataka from Hospet to Tinaighat is funded by the Asian Development Bank (ADB). This stretch lies outside of the tiger corridor and protected areas allowing the ADB to deftly slot it as a category ‘B’ project with potentially less significant adverse impacts on the environment. However, to complete the railway double tracking project, this phase continues into Phase II cutting across wildlife corridors and the ecologically sensitive Western Ghats from Tinaighat to Vasco in Goa and is the site for grave environmental concern in both impacted states. Rajani Santosh, environmental activist based in Bengaluru, Karnataka and member of Growthwatch India, explained how the ADB which funded Phase I of this project had paved the way for Phase II to be implemented which completes the coal corridor route (Vasco port at Mormugao, Goa to Hospet in Karnataka). According to Dr. Yellappa Reddy, retired Indian Forest Service (IFS) officer & former Environment Secretary to Government of Karnataka, the project is ‘ECOCIDE’, “the doubling tracking project spells a death knell for the region and its tiger populations that traverse this Tiger Corridor connecting the forests of three states Karnataka, Maharashtra and Goa.” He also added that “the fragmenting of the landscape due to activities like tree-felling not only damage this ecologically sensitive area in the immediate future but also emphasized that they cause long term irreversible changes to this unique ecosystem.” Dr. Reddy who served at the Anshi – Dandeli reserve region (Kali River Tiger Reserve) for 5 years, is certain that it is a unique biodiversity hotspot under severe threat from multiple linear infrastructure projects like national highway, doubling of railway line and electric transmission lines. Advocate Sreeja Chakraborty mentioned how citizens, scientists & researchers have been opposing this project “impacted communities came across the project being executed in the midst of the first COVID-19 lockdown, it has acquired w.r.t Wildlife Clearances and Forest Clearances amidst the pandemic!” She also explained that “ADB’s funding of INR 2200 crores invested for the Phase I project made possible the ecologically destructive Phase II. The Central Empowered Committee constituted by the Hon’ Supreme Court of India, had prior to the second wave of the pandemic, on 23rd April 2021, submitted a report to the Supreme Court regarding the double tracking of railway project that endangers the Tiger Corridor, which is already fragile due to road widening and transmission projects.” The same sentiment was echoed by Vikas Bhagat, Secretary, Goenkar, Goa, “we have been opposing the railway double tracking project from the very beginning, and have still found no respite because the authorities are choosing to turn a deaf ear to the people in spite of repeated appeals, agitations and demonstrations.” The project is still ongoing despite the report of the National Tiger Conservation Authority (NTCA), stating that the project must not be undertaken in the form that it was envisaged and had asked for further studies to be done. Vidya Dinker, Coordinator, Growthwatch India averred that “this is an affront to the peaceful but consistent opposition on the ground to the whole project of the South Western Railway that basically facilitates a coal corridor for the Adani and JSW groups from their coal handling ports in Goa, inland to industry around Hospet. That the Karnataka Forest Department issues such tree felling orders in stealth while the project is under legal challenge is clearly a blatant attempt to create a fait accompli situation and render the legal challenges infructuous.” ### For more information contact Rajani Santosh or Vidya Dinker of Growthwatch India at growthwatch.in@gmail.com or through their mobile nos +91 9972203129, +91 9845323869.

Background and Introduction In August 2020, the ADB's Independent Evaluation Department (IED) published a sector-wide evaluation on the Bank's energy financing portfolio and policy over the past decade (2009-2019) [1]. Over that time, the IED indicated that 42.5 billion USD was allocated by the ADB to the sector (second only in volume to that of transport), 50% of which was targeted towards four countries alone (India, Pakistan, Indonesia, and Bangladesh), and increasingly concentrated in the private sector. It also found that the ADB had given "limited attention" to support energy access for remote communities and most marginalized populations [2] (such as through locally scaled mini- and microgrid solutions), instead prioritizing large-scale infrastructure projects that have entailed "limited due diligence". As a result, the IED suggested that to date, the ADB has by and large not been successful in systematically meeting the energy needs of borrowing countries' populations. The IED concluded that the ADB should, as a priority, update its 2009 Energy Policy to ensure alignment with the institutional priorities of Strategy 2030 and incorporate a formal withdrawal from financing of new coal power projects along with support to borrowing member countries for a rapid phase-out of coal-based energy infrastructure, as well as stricter guidelines for supporting fossil gas and oil. While the IED's recommendations were not ambitious enough to recommend the IPCC Pathway 1 scenario for Paris 1.5 degree alignment -- as demanded by civil society -- we as NGO Forum on ADB recognize the IED's recommendations as a critical indication that the ADB is long overdue in evaluating and overhauling its current Energy Policy. As the ADB staff began preparing their draft Energy Policy paper earlier this year, civil society organizations across the world -- including the NGO Forum on ADB -- formally submitted to the ADB management their own assessment of the damaging legacy wrought on communities by the ADB's 2009 Energy Policy, titled Global Civil Society Demand Statement For A Clean, Just, And Fossil Free ADB Energy Policy [3] in March 2021. It wasn't until May 2021 that the ADB's Sustainable Development and Climate Change Department (SDCC) formally published the draft of the new proposed energy policy, open for limited comments via an online portal until the end of June 2021. The NGO Forum on ADB (Forum), as an alliance of civil society organizations, groups, and communities grounded in the realities of South, Southeast, and Central Asia, welcomes this opportunity to give input. However, we note with regret how local peoples' networks and groups representing populations most affected by the ADB's energy portfolio have been to date shut out of meaningful consultation processes for the policy draft, given that there are no translated versions, a lack of explicitly encrypted options for digital submissions of comments, limited opportunities to give input during interactions with responsible ADB personnel, and a lack of any clarity on how input will be taken into account, or precise timelines for doing so. Despite these critical questions surrounding the transparency and openness of the process for addressing concerns of the very communities that ADB's energy sector projects and investments affect, the NGO Forum on ADB submits the following analysis in good faith. Comments and Recommendations on the Draft Policy’s “Background and Introduction” and “Changing Energy Landscape” From the outset, the Forum appreciates the ADB's decision to formally abandon its association with new coal power projects as recommended by the IED. This commitment must -- without exception -- extend to all support funneled through financial intermediary modalities. As a step in this direction, we suggest identifying that the bank will explicitly withdraw support for those businesses with no stated intention to phase out involvement in the coal sector along 2030/40 timelines as identified in the internationally recognized Global Coal Exit List (GCEL). As the IFC's Head of Climate Finance, Peter Cashion, has already affirmed, "The GCEL is a one-of-a-kind resource for investors and financial institutions that want to understand and manage climate risks in their portfolios." Furthermore, although we welcome the ADB's stated interest in expanding its portfolio in small-scale, renewable energy investments, we urge the bank to more explicitly offer support for appropriately-scaled, non-resource intensive renewable and locally managed electrification options, consistently integrating this priority into the policy. In this regard, we question how the stated prioritization of regional/cross-border connectivity infrastructure, including installation of high voltage transmission lines and gas pipelines along with suggested investments in large scale, resource-intensive infrastructure projects (such as multi-purpose large-scale dams and waste-to-energy facilities) with major social, environmental and climate consequences, will not result in repeated failure to meet the actual needs of remote and marginalized populations. It is now critical that the ADB seize upon this opportunity to become a Paris-aligned financial institution (inclusive of projects financed, investments, and operational policies), supporting just transitions across Asia with due attention to its own safeguards and international human rights standards. Indeed, the draft policy explicitly acknowledges that the previous 2009 Energy Policy was not climate-responsive -- and as such, needs to be updated in light of borrowing member countries' respective Nationally Determined Contribution plans and commitments under the Paris Climate Accord. This shift is, in principle, supported by civil society, but a detailed articulation is needed on the overall phasing out from fossil fuels by the ADB to align with the Paris Agreement. Accordingly, we recommend that ADB's Energy Policy explicitly support the IPCC's Pathway 1 scenario as an overarching policy objective. The science already exists to tell us this is the best option that we have to avert reaching a tipping point when mitigation, adaptation, and resilience in the face of climate change may no longer be possible. This forward-looking shift requires nothing less of the ADB than to fully invest in spurring on the advance of non-resource intensive, appropriately scaled options for the energy sector reliant on the power of the sun and wind. While the ADB pivots its investments away from fossil fuels and into renewable energy, we strongly urge the ADB to proactively support measures that facilitate the just transition of the labor force from the fossil fuel-related industries to the renewable energy sector, in line with ILO core conventions. A full and just transition in borrowing countries will require the labor force's participation -- on their terms and in good faith -- and in supporting this shift, the ADB accordingly has a responsibility to ensure jobs created in the renewable energy sector enable socially just transitions. Concretely, it means supporting borrowing member countries in leaping towards renewables, rather than contributing to any stalling along the way by offering unnecessary support for fossil gas. If "Paris alignment" is to be among the goals of the ADB, then first and foremost, a priority should be to support member countries in averting carbon overshoot, keeping fossil gas in the ground. Any reference to carbon neutrality must be clarified with specific measurables and timelines as the definition remains loose and accounting methodologies opaque. We therefore, hope that a final draft will integrate a more consistent perspective on the imperative to shift towards scaling up affordable, accessible, renewable energy to meet the health and well-being of the public, offering not only the best hope we have to limit global heating, but also for community-based resilience during the recovery from Covid-19. In this regard, we suggest that references to SDG 7 (on energy access for all) be consistently coupled with SDG 13 (on climate action). The policy's framing of the role of gas as articulated in Section 20 appears to reiterate the obsolete assumption that it can continue to function as a transition fuel despite the "deep decarbonization" required by the Paris Agreement. This approach to fossil gas is no longer scientifically or economically tenable. Cleaner, cheaper power options are available at a viable cost and scale for national deployment across the region. In light of the climate crisis, locking member countries into reliance on new fossil fuel infrastructure, subject to volatile international markets, would appear to be an environmentally, socially, and economically irresponsible investment choice given the ADB's limited resources. Grave environmental and human rights tolls associated with the gas value chain mean it simply cannot be part of a vision of a climate-resilient future -- either for affected communities or the planet at large. Indeed, now that renewables are competitive options, building additional gas infrastructure multi-decade lifespans will now be displacing renewable energy. This is, therefore, a position that has no place in a forward-looking policy intended to be both Paris and SDG-aligned. By ending all direct and indirect support for gas power plants and other gas infrastructures, such as pipelines and LNG, the ADB can take the lead in the region, championing a just transition and recovery from Covid-19. However, if the ADB continues to finance gas projects, all funding should be assessed through strict criteria, excluding projects that don't eventually transition reliance to renewables in a time-bound manner and are non-compliant with stringent emissions standards. These additional criteria are recommended to limit the entry of gas projects and allow only those projects with allowable emissions according to climate science. We also note that waste incineration statistically stands among the most polluting energy sources with high carbon intensity, second only to coal projects. Sustained operations require a vast amount of waste to be burnt for 20-25 years, including typically plastic feedstock, which could otherwise be recycled or reused. During this policy review, civil society groups have submitted several letters and statements to ADB calling out an end to WTE incinerator investments[4]. These projects should also be dropped from the pipeline of any viable decarbonization energy plan promoted by the ADB for borrowing member countries. Comments and Recommendations on the “Objectives and Guiding Principles of the Energy Policy” The ADB indicates that it will rely on a list of types of projects that can be categorized as aligned or not aligned with the Paris goals. However, the question of which types of projects would be classified as such would vary depending on which Paris goal is being pursued. Thus, we recommend that decisions must be made in consideration of appropriate strategies that will align to limiting warming to 1.5 C, and further, that an objective of Paris alignment explicitly takes into consideration obligations incorporated into the Agreement's preamble (e.g. respecting Indigenous Peoples’, local community and women's rights as well as the right to health as per international standards)[5]. In addition, as waste incineration is the most expensive way to produce energy and manage waste, it is neither aligned with a 1.5C future, nor acts as a least-cost stable energy supply. Meanwhile, neither large-scale hydro nor geothermal projects should be considered among the menu of options for financing resilient and just transitions. In relation to shadow carbon pricing (Section 33), the ADB suggests a cost of only 36.3 USD per ton of tCO2, increased by 2% annually in real terms, which is the same price that ADB adopted in its revised Guidelines for the Economic Analysis of Projects released in March 2017. ADB cites the IPCC's Fifth Assessment Report as a reference. However, this is a report that was published prior to the IPCC's Special Report on Global Warming of 1.5°C, which found a robust difference in climate impacts and associated risks, and emissions pathways and system transitions, between 1.5°C and 2°C global warming. A 36.30 USD/tCO2 is among the lowest carbon prices imposed by MDBs in the upper range of mid 55 USD/tCO2. The High-Level Commission on Carbon Prices suggests that the explicit carbon-price level consistent with achieving the Paris 2°C temperature target is at least USD 50–100/tCO2by 2030. We recommend 100USD/tCO2 by 2030 as the baseline, with a determined faster and a higher rate of increase until 2050, to approximate the cost that is closer to achieving the 1.5°C goals. Section 37 mentions that ADB will ratchet up private-sector lending, increasing it to one-third of the share of ADB lending by 2025 by increasing it to more than 50% of current levels. While the draft policy states that non-sovereign energy operations, including lending through financial intermediaries, will align with ADB's Strategy 2030 vision, it severely lacks language on the necessary measures to ensure this, let alone compliance with the Bank's safeguard standards and Paris alignment. An increase in the movement of capital towards the private sector necessitates an increase in the Bank's responsibility to monitor and assess how its loans are being used and ensure that its private sector clients hold the same visions and principles for the sector. In this regard, we note with concern that the substantive references to energy connectivity in fragile and conflict-affected states (Sections 35 and 39) suggest that private sector operations will be prioritized. It is not clear how alignment with the ADB's safeguards will be verified in this context, especially given that opportunities for safe, inclusive, participatory, gender-sensitive project consultations free from the threat of reprisals would be highly limited, if not impossible, as would verification as to whether free, prior and informed consent is granted in cases where affected communities identify as Indigenous Peoples. In addition, operations would be rolled out where civil society groups cannot safely conduct external monitoring work free of fear of reprisals. In principle, the new ADB Energy Policy should not commit the ADB's limited resources to advise borrowing member countries to liberalize, unbundle or further open up their sectors for private ownership without first assessing whether the social, environmental, and economic impacts of the ADB's own financing to countries in this regard currently are falling in line with the standards outlined in the Bank's safeguards. Furthermore, we suggest that dispersed private sector/financial intermediary modalities not be promoted as a means to financing operations in fragile and conflict-affected states, given the lack of clear ways to ensure transparency and compliance with safeguards. The Forum takes note that Section 43 reiterates the ADB's commitment to withdraw from financing coal-powered projects and to support the rapid phaseout of reliance on coal generation. However, there is no indication of how the ADB will deal with its existing investments in coal. We therefore, urge the ADB to include ADB-financed coal projects in the rapid and planned coal phaseout, including the Jamshoro coal plant, which is still an active loan project. Furthermore, regional and cross-border grids reliant on high voltage transmission lines are typically connected to large scale infrastructure and should be carefully assessed to ensure that the projects to which the ADB provides energy connectivity do not violate safeguard and international human rights standards, including the rights of affected Indigenous Peoples' populations to free, prior and informed consent. Comments and Recommendations on “The Energy Policy” On “Securing Energy for a Prosperous and Inclusive Asia and the Pacific” While the Forum welcomes the Bank’s suggested commitment to support borrowing member countries meet SDG 7 by focusing on ‘last mile’ electrification needs, including local cooking and heating options, we recommend the energy policy should explicitly remove considerations related to reliance on fossil fuels -- not only because of the implications for the climate, but also as it is not an appropriate solution for local economies to rely upon given the price volatility and lack of guarantees of consistent, affordable access. Instead, we suggest the ADB should include specific financing targets for community and publicly owned distributed renewable energy and metrics to ensure these projects promote decent work and affordable energy. The policy must directly allow direct grants and concessional finance for DMC governments to own and operate integrated renewable energy systems. Community participation and women’s engagement in the planning process of rolling out off-grid and microgrid solutions is important, but such engagement should not be a mere ‘check-box' exercise to confirm that diverse voices are heard. Such involvement is only meaningful if there are clear provisions and lines of accountability surrounding how input will be integrated into project design, implementation, assessment, and a clear process to hold decision-makers to account. Indeed, if the ADB equates gender mainstreaming with access to energy, jobs, and limited input within predetermined project cycles, systemic gender inequalities in relation to access to communal/shared resources may be exacerbated due to project citing decisions to which they may not have had opportunities to change. Beyond considering community consultation processes for ‘last mile’ projects, we would recommend the ADB consider how its support to borrowing member countries in the upstream energy planning and project selection processes could integrate best practices of inclusive, participatory citizen involvement, including ensuring gender parity. Furthermore, when the ADB is financing operations in fragile and conflict-affected states, the Bank must verify how women’s organizations will have meaningful opportunities to contribute to local and national planning processes, as per UN Security Council Resolution 1325. On “Building a Sustainable and Resilient Energy Future” This section explicitly recognizes that the Asian region is, without exception, vulnerable to climate change, exposed to natural hazards like earthquakes and tsunamis. It is also informed by the suggestion that reliance on fossil fuels comes with significant environmental and health damage, which "undermine[s] the steadiness of the development efforts and pursuit of well-being in the region's DMCs." This acknowledgment that reliance on fossil fuels benefits neither national development nor peoples' well-being should remain consistent throughout the draft policy, including language on fossil fuel investments. In addition, changes in hydrology that impact access to water resources are suggested as among the key impacts of climate change. In this regard, then, large-scale hydropower and geothermal projects, both known to have serious impacts on underground water flows and riparian ecosystems, would be questionable investments -- if climate mitigation and adaptation are indeed to be prioritized. We also note with concern that Section 67 generally mentions that the Energy Policy will be compliant to ADB safeguards. The Forum would recommend this statement be specifically strengthened by replacing "will'' with the operative “must”. Furthermore, it should be noted that the gendered, socio-economic, rights-based, and environmental impacts of energy sector operations all should duly receive attention, not just for the sake of avoiding, minimizing, and mitigating environmental implications. In Relation to Support for Large-scale / Multi-Purpose Hydropower Projects Based on the track record of the ADB’s investments in large hydropower projects and the reality that large dam reservoirs are a major source of methane emissions, the Forum suggests that the ADB’s new energy policy should consider such projects neither sustainable nor resilient in the face of climate change. Indeed, they have been shown across the region to represent a significant threat to biodiversity and destroy critical ecosystems, including in the Mekong and Himalayan regions. This has been, for example, verified in a recent Mekong River Commission Council Study, which confirmed that proposed dam developments would be “likely to reduce resilience and increase the vulnerability of rural communities in the Mekong impact corridor, with the main benefits going to power companies and consumers mainly outside the corridor at the expense of fishing and rural households.” The dispossession of communities that live in areas designated for dam reservoirs, the havoc wreaked on the lives of people living downstream and upstream, exacerbated socio-economic inequalities of entire populations, and the destruction of resilient, intact river sheds are all well-documented impacts of multi-purpose and large-scale dams, and cannot be considered sustainable. This is particularly critical now when climate change is already impacting weather patterns -- meaning that in times of extended droughts, expected power generation by hydropower projects is no longer possible, while in times of heavy rainfall, sudden unannounced releases of water from reservoirs upstream can lead to devastating flooding in downstream areas. As a result, we recommend removing references to “sustainable hydropower” from the new Energy Policy. Indeed, given the need for the ADB to prioritize its use of funds at this juncture in time, decentralized options for power generation would offer ways to meet the energy needs of people without putting at risk thousands of peoples livelihoods for projects that may never be possible to operationalize due to climate-related hydrological fluctuations. Significantly, in recent years, evidence has emerged that installing new solar and wind projects is already outpacing the development of hydropower dams in the Mekong region. Moving forward, we suggest it’s time for the ADB to take stock of these trends and leave large-scale dams out of the ‘renewable energy mix’ considered for the new Energy Policy. In relation to Support for Waste-to-Energy Projects (WtE) Sections 82, 90, and 98 suggest explicit support for waste incineration by labeling the criteria as “feedstock for combustion,” which refers to all thermal WtE systems, without exception. However, thermal waste to energy operations produces toxic ash and emissions containing heavy metals and persistent organic pollutants. Yet, borrowing member countries typically lack robust regulatory standards and systems for disposal, thereby placing surrounding communities at risk of severe air, water, and land contamination. Therefore, clear screening criteria should be stated in the draft policy, rather than relegated to internal guidance notes for staff, ensuring that investment decisions are made based on robust consideration of waste hierarchies, along with the social, environmental, and economic impacts. Moreover, the notion suggested in the draft policy that burning biomass could be undertaken using WTE systems could trigger deforestation in surrounding areas if clear measures are not in place to clarify what is intended as feedstock. In effect, suggesting Waste-to-Energy projects act as sustainable renewable energy sources to be relied upon like solar and wind-powered options -- as implied in the draft policy -- relies on misconceptions not grounded in the practical evidence-based resulting from operational impacts, including as documented at ADB project sites in Sri Lanka and the Philippines. Waste incinerator facilities burn waste, which includes plastic materials as feedstock (i.e., sourced from oil-based products and potentially recyclable), and can be thus considered as a carbon-intensive form of energy that fails to be aligned with Paris Agreement commitments. Significantly, waste incinerators, along with other thermal waste-to-energy systems, cannot serve as a stable energy source as they lock governments into meeting feedstock quotas through put-or-pay contracts that hinder waste reduction, recycling, and composting measures. Far too often, cities cannot supply a steady amount of waste to the facility. With negative health impacts for both workers and communities, support for waste incineration should also not be considered a viable part of a just transition or green, just recovery from COVID-19. Indeed, given the systematic lack of transparency and access to information surrounding such project operations, it is unclear how full social and environmental risk impacts will be assessed before project implementation or how these impacts would be avoided and compensated during implementation stages. Therefore, we would recommend the ADB withdraw waste-to-energy from its list of renewable energy options to be either financed or be considered within the scope of advice provided to borrowing member countries. In relation to Support for Gas Project Investments For the Bank to ensure its financing aligns with a 1.5°C Goal/IPCC Pathway 1, we recommend a full withdrawal from financing all fossil fuel projects -- including midstream and downstream gas financing and support -- through technical assistance grants, associated facilities, and policy advice. Given the ADB’s finite financial resources available for dispersal, financing for renewable energy projects through scaling up existing plans and ambition for renewable energy development should instead be prioritized. ADB should avert enabling further fossil gas financing, instead letting other financial entities pursue gas financing when necessary. This would entail adjusting the bank’s position on fossil gas, removing both conditions when financing fossil gas are permissible and when regional connectivity for gas-related infrastructure will be supported. These provisions to avert support for fossil gas should then also be extended to indirect investments through financial intermediaries or other financial modalities. In relation to the ADB’s suggestion of increased investments in carbon capture and storage projects, the Forum recommends withdrawing such project support at this time, given the reliance on unproven and expensive technologies that divert public finance away from a just transition and viable renewable energy options. In relation to Re-engineering/Retrofitting Fossil Fuel Projects Clear assessment guidelines are needed to prioritize closing and retrofitting sites in a manner that is consistent with a 1.5C pathway, advances a just transition for workers and communities affected, and ensures full closure of the site with full ecological rehabilitation. In this regard, the Forum recommends that project selection start off, prioritizing those financed by the ADB in the past. Since the Bank commits to support the early retirement and decommissioning of coal power plants, we recommend that it starts with ADB-funded coal projects. Given the Bank’s familiarity with these projects and proponents, the Bank can more easily encourage and assist in the early retirement or decommissioning. On Financial Intermediaries and Increased Support for the Private Sector In relation to the ADB's stated intention to grow its private and non-sovereign portfolio in the sector for energy, we note there are no detailed provisions on how the bank will prevent financing of coal, oil, and gas or other non-Paris aligned projects when resources are funneled through financial intermediaries (FIs). Many of the ADB's peer MDBs, including the World Bank Group and European Investment Bank, have already started to limit lending to financial intermediaries for some or all fossil fuels. Specifically, Section 130 indicates the prioritization of dispersed subprojects relying on FIs. ADB's indirect lending to financial intermediaries (FIs) is growing rapidly, increasing tenfold in just a decade. At the same time, a recent internal ADB evaluation pointed to problems with environmental and social protections in indirect lending, suggesting "projects implemented through FIs have remained the weakest performers on safeguards." This increases the risk of ADB funds being used to support fossil fuel projects. Although the draft policy promises enhanced transparency, there is currently little to no public disclosure of which sub-projects are supported via ADB FI investments, with environmental and social information routinely redacted. Without transparency, it will be impossible to track and assess ADB's commitments with regard to fossil fuels in its FI lending portfolio. The ADB also has an obligation to ensure that all communities affected by subprojects are aware that project financing is associated with the bank. Therefore, we suggest that at a minimum, there must be a disclosure of all subprojects and separate assessments to ensure safeguard compliance and Paris alignment in advance of project approval. Furthermore, it is not clear how the suggestion to incentivize private sector involvement, including through public-private partnerships and providing advice to governments for liberalizing the sector, will ensure due consideration of the central guiding principles outlined by the ADB in earlier provisions related to just transition, compliance with safeguards, and meeting the needs of marginalized/remote communities. Given that the private sector's incentive is to drive up profit margins, it is particularly questionable how the ADB would intervene effectively to ensure marginalized communities do not remain under-served or left with sub-quality or unaffordable services. As a priority, the ADB must first support and assist borrowing countries in assessing the real impacts of privatization and deregulation in their energy sectors. [6] On Subsidy Reform It is positive to see that sections 101 to 105 clearly articulate the problems associated with fossil fuel subsidies -- which are a direct obstacle to renewable energy transition and investment. We have seen that power-producing companies in countries such as Bangladesh and Thailand, have required capacity charge payments from governments even when power plants have not been in operation. Such price distortions and unabated support for fossil fuel-based power generation through subsidization directly threaten our collective future. While Section 105 alludes to removing fossil fuel subsidies, it still fails to articulate in explicit terms how current users will be able to protect themselves from further increases in electricity charges. In this context, there is the risk that power companies and private distributors will shift the financial burdens onto users if government subsidies are no longer provided. Therefore, the ADB’s new energy policy should elaborate a clear plan for ensuring marginalized populations will be insulated from price spikes when reforms related to the phasing out of fossil fuel subsidies are implemented. On Integrated Energy Planning In relation to the suggestions articulated in Sections 111 and 112, the ADB should be explicit in how civil society and community participation will be integrated into all energy-related planning processes. Energy planning processes generally fail to be inclusive, with long-term power plans and project-related decisions across the region being crafted behind closed doors by government officials, private sector power companies, and MDB-associated staff or consultants. These plans do not reflect the views and concerns of a vast majority of people, particularly the most marginalized in urban and rural communities. In practice, one result of such isolated and exclusive decision-making approaches is the systematic development of overcapacity in power generation, as can be observed in Thailand and Bangladesh at this time. In contrast, high-level planning processes must be explicitly centered upon principles of Integrated Energy Planning, and accordingly be considered within the scope of the ADB’s engagement with borrowing country governments. Ensuring marginalized populations are more systematically involved in upstream energy sector planning is imperative. Otherwise, long-term plans for meeting SDG7 will fall far short of real, lasting results grounded in meeting the needs of diverse populations. Significantly, civil society groups in South and Southeast Asia, for example, have already been advancing pro-people energy plans, concretely showing how alternative planning processes can be put into practice while championing a future that is simultaneously Paris-aligned, rights-based, inclusive, and rooted in a view towards just transition. On “Integrated Cross Sectoral Operations to Maximize Development Impact” On the issue of projects pertaining to cross-border electricity transmission, distribution, and trade, the existing power dynamics -- both in relation to states and powerful corporate players -- in sub-regions should be closely reviewed. The ADB must ensure that cross-border investments and projects do not further exacerbate the unequal power dynamics in each region. Specifically, we also note that in regard to Section 126, the provision stipulating that the bank "will refrain from supporting dedicated cross border transmission lines linked to coal-fired power plants," should in fact be expanded, by adding large-scale hydropower and waste-to-energy projects to the list of exclusions. Significantly, spurring on regional integration jeopardizes energy sovereignty and fails to consider energy as a part of a shared commons. While members of the Forum are in some cases witnessing the direct threat posed by LNG importation to domestic energy resources and pricing, in other instances, members are confronting the reality that cross-border sales of electricity in no way alleviate -- but rather exacerbate -- regional inequalities and energy poverty. Going forward, the ADB must be mindful of the actual implications for communities on either side of national borders that result from the regional integration agenda it promotes. Concluding Thoughts This policy submission incorporates the views of a wide range of civil society groups across the region and beyond. We hope that this submission will be considered a basis for further forms of engagement, including in relation to key areas such as gas, private sector operations, large hydro, waste-to-energy, and others. We look forward to your comments and thoughts on these suggestions and hope the recommendations will be duly reflected in the version of the Energy Policy that will be advanced to the Board for consideration -- one which is aligned with IPCC Pathway 1 and upholds unequivocal support for meaningful, just transitions across the region. Mr. Rayyan Hassan Executive Director NGO Forum on ADB Endorsed by the following organizations – 350 Pilipinas, Philippines 350.org Asia, Asia Aksi! for gender, social and ecological justice, Indonesia ALTSEAN-Burma, Burma An organization for Socio Economic Development, Bangladesh Asian Energy Network, Philippines Asian Peoples Movement on Debt and Development (APMDD), Regional / Asia Bangladesh Working Group on External Debt, Bangladesh Blue Dalian, China Both ENDS, Netherlands Buliisa Initiative for Rural Development Organisation (BIRUDO), Uganda Center for Energy, Ecology, and Development, Philippines Centre For Environmental Justice, Sri Lanka Chairperson Oil Workers' Rights Protection Organization Public Union, Azerbaijan Change Initiatives, Bangladesh CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh Climate Watch Thailand, Thailand Collective for Economic Justice, India Committee for the Abolition of Illegitimate Debt (CADTM), India Community Empowerment and Social Justice Network (CEMSOJ), Nepal Community Resource Centre, Thailand Consfound, Mongolia EarthRights International, Mekong Region Environics Trust, India Environmental public society, Armenia Equitable Cambodia, Cambodia Food first Information & Action Network (FIAN), Sri Lanka Freedom from Debt Coalition, Philippines Fresh Eyes, United Kingdom Gender Action, Global Global Alliance for Incinerator Alternatives (GAIA) - Asia Pacific, Asia Pacific region Global Rights, Nigeria Green Advocates International, Liberia Green Alternative, Georgia Grootouders voor het Klimaat, Belgium Growthwatch, India Indian Social Action Forum (INSAF), India Initiative for Right View, Bangladesh Integrated Community & Industrial Development Initiative, Bangladesh International Accountability Project, USA International Association of People's Lawyers, Australia International Rivers, United States Japan Center for a Sustainable Environment and Society (JACSES), Japan Kilos Maralita, Philippines KRuHA - people's coalition for the right to water, Indonesia Law and Policy of Sustainable Development, Vietnam Life Haven Center for Independent Living, Philippines Mangrove Action Project, USA Mekong Watch, Japan Nash Vek, Kyrgyzstan Oil Change International, United States Oil Workers' Rights Protection Organization Public Union, Azerbaijan Oxfam in Cambodia, Cambodia Oyu Tolgoi Watch, Mongolia People's Health Movement Nepal, Nepal Peoples Development Institute, Philippines Prantojon, India Progressive Plantation Workers Union (PPWU), India Public Services International, India RDO, Pakistan Recourse, Netherlands Rivers without Boundaries Coalition, Mongolia Rivers without Boundaries, Russia Scholar Tree Alliance, China Snow Alliance, China Sri Lanka Nature Group, Sri Lanka Umeedenoo, Pakistan University of the Philippines Center for Integrative and Development Studies, Program on Alternative Development (UP CIDS AltDev), Philippines urgewald e.V., Germany WomanHealth Philippines, Philippines Witness Radio, Uganda Youth Group on Protection of Environment, Tajikistan Youthnet for climate justice Bangladesh, Bangladesh YPSA, Bangladesh Download PDF version here. [1] ADB. 2020. ADB Sector-wide Evaluation: ADB Energy Policy and Program, 2009–2019. August 2020. Accessed online. [2] Ibid. p. 10 [3] March 2020 FFA Global Statement link (2021). Retrieved 29 June 2021, from https://www.forum-adb.org/post/global-civil-society-demand-statement-for-a-clean-just-and-fossil-free-adb-energy-policy [4] GAIA Statement on WTE . (2021). Retrieved 29 June 2021, from https://www.no-burn.org/wp-content/uploads/Sign-on-letter-to-ADB-EDs-ADB-Energy-Policy.pdf [5] Leaving behind ADB’s Dirty Energy Legacy: Civil society critical reflections and recommendations. (2021). Retrieved 29 June 2021, from https://www.forum-adb.org/specialpublications. [6] For instance, in the Philippines, the ADB assisted the government in restructuring and privatizing the power industry by enacting the Electric Power Industry Reform Act of 2001 (EPIRA). However, the EPIRA directly led to electricity rates in the country being monopolized by the private sector, resulting in arbitrarily high user fees being charged by Meralco over the years during peak and off-peak seasons without government regulatory oversight control. According to the Global Retail Electricity Tariff Survey conducted by the International Energy Consultants, the Philippines ranked 2nd in Asia and 24th globally in expensive electricity prices. Furthermore, the 37th EPIRA Implementation Status Report revealed that its average electricity rate in 2020 is its highest in the last 3 years.

Download PDF version here. Read Forum network ACEF Energy Policy Consultation Statement here.

We, Representatives of South Asian Civil Society are boycotting the Asia Clean Energy Forum (ACEF) being organized by the Asian Development Bank (ADB) in association with United States Assistance for International Development (USAID) and Korea Energy Agency (KEA). The ACEF itself has its own identity crisis. Alongside the ADB, USAID is one of two co-organizers of the ACEF, while 5 out of 7 donor agencies of the ACEF are from northern countries. This bias towards the richer northern countries is also reflected in the workshop and side events lined up. Community led, decentralized renewable energy systems are not included in the agenda while there is a long list related with technology, investments and policy reform. The ADB regularly organizes the Asia Clean Energy Forum (ACEF) while their hands remain dirty with their fossil fuel investments and commitments. ADB has been promoting a private-led fossil fuel energy system in Asia, especially the South Asian countries. According to its annual report 2020, ADB has invested USD 33.76 billion in the Energy sector of South Asia which is 25.77% of its total investment in the region. Out of the total energy investment, only 2.13% has been invested in renewables, while 61.93% is towards fossil fuels and 34.21% for transmission and distribution. ADB is still financing the devastating Jamshoro Coal Power Plant in Pakistan, Upper Trishuli-1 Hydropower Project in Nepal, Rupsha LNG Based Power Plant in Bangladesh and Liquefied Natural Gas (LNG) Power Generation to Diversify Energy Mix Project in Sri Lanka which are not only emitting excessive greenhouse gases in the atmosphere, but also destroying the national economy, local environment and livelihoods. In India, ADB is promoting northern corporations like Goldman Sach, CDPQ, PROPARCO etc. in the guise of promoting Renewables. It is after the tireless efforts of various people’s movements and civil society organizations, that the Asian Development Bank (ADB) finally decided to end their investments in coal. The decades-long struggle of the climate and social justice movements celebrated this as a victory of our collective action. But the ADB uses this opportunity to brand itself as a prophet of clean energy while even their own coal divestment declaration is not ambitious enough to mention an immediate and complete phase-out of coal. Their Energy Policy too, is still far from being clean. The draft energy policy allows retrofitting of existing coal plants and considers funding fossil gas especially LNG and Waste to Energy (WTE) which are just other forms of dirty energy. The ADB has used the COVID-19 pandemic situation to avoid robust and meaningful consultation. While marginalized communities - including but not limited to ethnic minorities, Indigenous Peoples, people with disabilities, women’s organizations, LGBTs and Dalit populations - are systematically excluded from the consultation process. At the same time, the ADB has been implementing a number of energy related projects in different countries across South Asia. Indeed, according to the ADB's own Independent Evaluation of the sector, India, Pakistan and Bangladesh have been among the top five countries at the receiving end of ADB's energy-related loans and advice over the past decade. Yet, if the ADB is intent upon partnering with our governments and the private sector to roll these projects out, why can’t they organize meaningful policy-based consultations with the communities? Illustrative of this approach is the South Asia regional session featured at this year’s ACEF, “Digitalization of the Electricity Utilities in South Asia” (Wed. 16th June). It appears completely out of touch with the realities of communities within the region in terms of what would be appropriately scaled energy solutions, promoting EVs, liberalization of electricity markets and ever increasing private sector participation in electricity distribution. We note that panelists during this session come from private and government sectors, including for example, the Global Smart Energy Federation (India), Ministry of Power (India), Bangladesh Power Development Board (Bangladesh) Ceylon Electricity Board (Sri Lanka) and Electricity Regulatory Commission (Nepal). Meanwhile, no air time is allocated for any representation from civil society groups or networks. To date, there has been no evident transparency in the process of ‘consultation’ designated within the ACEF, and no possibility for people from the region to give meaningful input within a framework of accountability, when we know our perspectives are being accounted for. As such, we demand that: Instead of posturing on clean energy, the ADB must first come up with a roadmap that categorically and clearly lays out the path towards an Asia that is 100% powered by renewable energy. It is only through this that we can finally say that the Energy Forum they regularly organize is truly Asian and Clean. An Energy Policy through meaningful consultation with the affected and diversified communities on the ground and civil society at national, regional and global level. Otherwise, this Asia Clean Energy Forum (ACEF) and the Energy Policy will be treated as just another set of ornamental arrangements for ADB’s public image, apparently intended to speak to its donor countries and prospective private sector business partners only. And that is why, we, the South Asian civil society, can’t participate in an ACEF process which cloaks them in green, glossing over their destructive track record across the region. References: https://www.asiacleanenergyforum.org/donors-and-partners-2020/ https://www.asiacleanenergyforum.org/agenda/full-agenda-2021/ Country Factsheets, Asian Development Bank (ADB), May 2021 https://www.adb.org/projects/47094-001/main#project-pds https://www.adb.org/projects/49086-001/main#project-pds https://www.adb.org/projects/53193-001/main https://www.adb.org/projects/54241-001/main#project-pds https://www.adb.org/sites/default/files/institutional-document/699206/energy-policy-draft-consultation.pdf