Asian Development Bank

Energy efficiency strategy, standards and investment

This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.

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Paris alignmentReasoning
Some progressThe importance of energy efficiency is recognised but this needs operationalising.
Overarching energy efficiency first strategy/principle
Energy efficiency is referenced as a priority in the climate strategy & covers the transport, buildings, and industry sectors. A lack of demand side energy efficiency investments in 2017 and 2018 suggests that this part of the strategy is not applied in practice. It is unclear how an energy efficiency first principle will be operationalised.
Transport energy efficiencyBuilding energy efficiencyFinancial intermediary energy efficiency
Adopted the “Avoid- Shift-Improve” approach.No standards included.ADB does not require financial intermediaries to follow energy efficiency standards.

Explanation

Energy efficiency finance

Energy efficiency investment data from the ADB shows that in 2017 and 2018, no investments were made in demand side energy efficiency. Supply side efficiency has been increasing over time. Within a review of its clean energy programme, the ADB defines energy efficiency as “either demand-side or supply-side energy efficiency projects that bring about electricity or energy savings from meeting the same level of demand with less energy inputs”. The demand-side investments between 2009 to 2015 were largely in clean energy components of other sectors such as agriculture, natural resources, and transport. In 2016, the focus was on lighting and agricultural water pumps.

Furthermore, in the ADB independent evaluation of the energy policy and programme it states that “no amount of generosity in classification can mask the limited number of efficiency initiatives on the demand side, where there was a shortfall in the application of both financial and knowledge capital”.

Buildings 

There do not appear to be energy efficiency standards for new buildings or renovated buildings. The operational plan for ‘Making Cities more livable’ refers to promoting increased energy efficiency in buildings. It also refers to ‘increasing access to heating and cooling systems using renewable energy’.

Transport

ADB has adopted the Avoid-Shift-Improve approach as common practice for transport lending. It has also committed to “develop operational pipelines in new fields of sustainable low-carbon transport, including urban public transport, railways, multimodal logistics, and intelligent transport systems” and also “identify and implement clean high-level technology options, including transport-related air quality improvement and low-emission vehicles”. For urban areas, the ADB uses a compact city concept, where it promotes integrated land use and transport planning.

However, in the mid-term review of its Sustainable Transport Initiative Operational Plan it has revised previous 2020 targets downwards for the share of funding towards urban transport and railways. The 2025 targets are also lower than the previous targets for 2020.

Financial intermediaries

The ADB does not appear to require financial intermediaries to follow energy efficiency standards. 

Industry

E3G intends to expand this metric to include industrial energy efficiency in the future.

Recommendation: ADB should look to increase its level of demand side energy efficiency investments. 

Recommendation: ADB should work to ensure that its common approach to the greenhouse gas accounting (GHG) of energy efficiency does not extend the lifespans and absolute emissions of fossil fuel assets.

 

Last Update: November 2020

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