Asian Infrastructure Investment 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 to be operationalising.
Overarching energy efficiency first strategy/principle
Key principle of energy strategy focuses on realising energy efficiency potential and references building, transport and industry sectors. Currently unclear how an energy efficiency first principle will be operationalised.
Transport energy efficiencyBuilding energy efficiencyFinancial intermediary energy efficiency
AIIB incorporates “avoid, shift and switch” into project selection but clarity needed on application.No standards included – usually follow national standards.No standards included but often a stipulated percentage of energy efficiency sub-projects.

Explanation

Buildings 

AIIB has no standards for building energy efficiency but the AIIB aims to follow the national building standards in the country. If these do not exist or depending on the needs of the client, AIIB will aim for higher standards including international building standards. However, more specifics on what these standards would be would be welcome as a clarification from AIIB. This applies especially if there was a fund which included energy efficient building projects.

Transport

AIIB incorporates the practice of the “avoid, shift and switch” framework into transport project selection to assist clients in project design. Furthermore, in AIIB’s sustainable cities strategy, increasing public transport investments is a short-term priority for AIIB. E3G looked at the total transport financing for AIIB in 2016 and 2017 and compared this to transport-related climate financing reported to the OECD. Almost a third or 29% of AIIB’s total transport financing is climate-related, due to one metro project. A large proportion of AIIB’s other projects are road projects. Clarification from AIIB on how this framework is applied to transport project design would be welcome.

Financial intermediaries

AIIB intermediary sub-projects are not required to follow specific energy efficiency standards or savings. This is normally determined on a project-by-project basis and usually involves an investment grade audit. The AIIB has placed some emphasis on having energy efficiency sub-projects in intermediary lending. For example, AIIB provided a USD 200 million credit line to a Turkish bank, requiring the share of renewable energy and energy efficiency projects to be greater than 60%. Furthermore, the document states that energy efficiency will have to “satisfy an energy saving ratio or CO2 reduction of 20% or more annually, or at least 50% in cost savings due to reduced energy consumption”

Industry

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

 

Last Update: November 2020

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