Accelerating Low-Carbon Development in Asia and the Pacific Region

Clean energy Program

� In 2014, ADB achieved clean energy investments of $2.4 billion, setting a new recorded for investments.

� ADB had met its target to reach $2 billion in annual clean energy investments by 2013—earlier than expected. Since then, it has pledged to meet or exceed $2 billion in annual investments going forward.

� Since 2010, ADB has raised over $820 million of clean energy bonds to support ongoing renewable energy and energy efficiency projects.

� ADB’s Clean Energy Financing Partnership Facility continues to support ADB’s Clean Energy Program under an expanded scope of operations. The facility now takes in nonfunding to better support private sector involvement through innovative financing mechanisms such as risk-sharing and subordinated contingent financing.

� Determined to “walk the talk,” ADB has made great strides in creating a sustainable office building. ADB Headquarters in Manila received a Gold LEED Rating from the US Green Building Council, and now features two major solar rooftop installations, a 571 kilowatt solar installation that came online in June 2012 and a 110 kilowatt solar installation that came online in March 2015.

The Clean Energy Program of the Asian Development Bank (ADB) is a multipronged, umbrella program that seeks to help developing Asian countries meet their energy security needs, facilitate a transition to a low-carbon economy, bring about universal access to energy, and achieve ADB’s vision of a region free of poverty.

The Clean Energy Program pursues these goals by supporting improved efficiency in the energy, transport, urban, and water sectors; aiding countries with the adoption and deployment of renewable energy sources; and improving access to energy for the poor, especially those in remote, rural areas.

Asia and the Pacific’s high economic growth drives an equally high demand for energy. While the global growth in energy demand is marked at 1.5% per year until 2030, that of Asia and the Pacific is seen at 2.4% for the same period.

Meeting this demand—yet keeping in mind the risks of even greater dependence to fossil fuels—is one of the great challenges facing Asia and the Pacific.

Utilizing energy efficiently to meet the demand is one key option for enhancing energy security and sustainable development in the region, while also reducing greenhouse gas (GHG) emissions. The introduction of advanced technologies on both the supply and the demand sides will contribute to slowing overall growth in energy demand. At the same time, increasing the amount of renewable energy in the region’s energy mix will help secure the region’s energy supply and reduce the region’s contribution to global GHG levels.

To support the wide-scale deployment of clean energy projects and new clean energy technology, ADB created a number of financing instruments. This combined approach to clean energy development places ADB at the forefront of the sector as its developing member countries continue with their transition to low-carbon development.

Major Milestones in the Evolution of ADB’s Clean Energy Program2008• Encouragedbytrendsintheregion,andinputfromitsdevelopingmembercountries,ADBsetsatargettoreach$1billionannuallyincleanenergyinvestment.Thistargetwasmetinitsfirstyearwithinvestmentsreaching$1.75billion.

2009• ADBunveilsitsEnergyPolicy2009whichisdesignedtorespondtocompellingchallengesinenergysecurity,climatechangeandenergyaccessbymakingthesepriorityareasforsupportinADB’senergysectoroperations.Specifically,thepolicylists“supportforcleanenergyinasmanywaysandsectorsaspossible”andmaximizingaccesstoenergyforall,especiallytheruralpoorascriticalpillarsofpolicy.

• ADBsetsatargettoreach$2billionincleanenergyinvestmentsannuallyby2013.• ADB’sCleanEnergyProgram(CEP)evolvesoutofanexistingenergyefficiencyinitiativeandistaskedtoaidintheimplementationoftheEnergyPolicy2009insupportofADB’slong-termstrategicframework,Strategy2020.TheCEPseekstoexpandADB’scleanenergyinvestmentsinsmallerDMCs;increasetheprogram’sassistancetodemand-sidecleanenergycomponentsinprojectsinwatersupplyandsanitation,transport,urban,agriculture,andothersectors;andtrackthepipelineofcleanenergyprojectsandmonitorachievementsagainsttheindicatorsoftheEnergyPolicy2009andADB’soverarchingdevelopmentgoals.

2010• AsiaSolarEnergyInitiative(ASEI)waslaunched,toidentify,develop,andimplement3,000 megawatts(MW)ofsolarelectricitygenerationby2013.ASEIisthefirstofADB’snewinitiativestoacceleratetheadoptionoflow-carbontechnologiesinAsiaandthePacific.

2011• ADB’scleanenergyinvestmentreached$2.1billion,surpassingitsannualtargetof$2billionby2013—2yearsaheadofschedule.ADBstatesthatitwillcontinuetoreachaminimumlevelof$2billioninannualcleanenergyinvestmentsannually,goingforward.

• ADB’sQuantumLeapinWindwaslaunchedtosupportdevelopmentof1gigawattofwindenergyinprioritycountries.

2012• ADBcleanenergyinvestmentsreachanewrecordof$2.36billionwith$247millioninvestedinsupportofnewsolarpowerprojects.

• ADBunveilsitssolarrooftopinstallationatitsHeadquartersinManila,thefirsturbansolarinstallationinthePhilippines.

2013• ADBpublishesitsupdatedreports“EnergyStatisticsinAsiaandthePacific”and“EnergyOutlookforAsiaandthePacific.”Trendsshowthattheregion’senergydemandisexpectedtogrowatveryhighrates,withtrillionsofinvestmentsinenergyinfrastructurerequired.Investingincleanenergywillbeneededinordertocounteranequivalentriseingreenhousegasemissions.

• ADBrecords$2.36billionincleanenergyinvestments,meetingandexceedingthetargetsetin2008.ADBpledgestomaintaincleanenergyinvestmentsofatleast$2billionannuallygoingforward.

2014• ADBHeadquartersinManilaswitchesoverto100%renewableenergyasitbeginssourcingitspowerfromgeothermalplantssouthofManila.

• ADB,alongsideUNDPandUNESCAP,arenamedasleadorganizationsfortheSustainableEnergyforAll(SE4ALL)Initiative’seffortsinAsiaandthePacific.SE4ALLisaglobalinitiativewhichseekstransformativechangeintheenergysector,andhassetthreegoalstobereachedby2030:attaininguniversalenergyaccess,doublingtheamountofrenewableenergyintheglobalpowermix,anddoublingtherateofgrowthinenergyefficiency.

PROGRAMS

Asia Least-Cost Greenhouse Gas Abatement Strategy (ALGAS) ProjectFunding sources: Global Environment Facility (GEF) through the UNDP, ADB, and the Government of Norway

• Assisted 11 developing member countries (DMCs) prepare inventories of greenhouse gas (GHG) sources and sinks in accordance with Intergovernmental Panel on Climate Change guidelines, developed national portfolios of technical assistance and investment projects on GHG abatement options

Promotion of Renewable Energy, Energy Efficiency, and GHG Abatement Projects (PREGA)Funding sources: ADB and the Government of the Netherlands through REACH

• Identified project opportunities, increased understanding of country-specific barriers to, and facilitated building of national capacities on renewable energy, energy efficiency, and GHG abatement (REGA) technologies and financing modalities, such as Clean Development Mechanism (CDM), in participating DMCs

Clean Energy Program Funding sources: ADB and Climate Change Fund

• EEI’s role and thrusts have been redefined as ADB’s Clean Energy Program (CEP) toward implementing the new policy and in support of Strategy 2020. The CEP will (i) expand ADB’s clean energy investments in smaller DMCs; (ii) increase the program’s assistance to demand-side clean energy components in projects in water supply and sanitation, transport, urban, agriculture, and other sectors; and (iii) track pipeline of clean energy projects and monitor achievements against ADB’s Managing for Development Results level 2 indicators and the indicators of the Energy Policy

FINANCING FACILITIES

Renewable Energy, Energy Efficiency, and Climate Change (REACH) Program Funding sources: Governments of Canada, Denmark, Finland, and the Netherlands

• Supported 28 projects across 27 countries totaling about $18.71 million in allocations. By the end of 2011, after 10 years of operations, a total of 24 projects, worth about $16.3 million, were completed

Clean Energy Financing Partnership Facility (CEFPF) Funding sources: Governments of Australia, Japan, Norway, Spain, and Sweden and Global Carbon Capture and Storage Institute

• Since it started operations in the last quarter of 2007, it has been expected to catalyze about $1.6 billion in clean energy investments

Clean Development Mechanism FacilityFunding source: ADB

• Established to provide DMCs opportunities to access additional financial resources through efficient emissions reduction by bridging the gap between buyers and sellers, ensuring a fair return for GHG abatement initiatives and assisting them to meet their commitments under the Kyoto Protocol

Energy Efficiency Initiative (EEI)Funding sources: ADB and Climate Change Fund

• Surpassed ADB’s clean energy investment target of $1 billion with about $1.6 billion in 2008 and $1.2 billion in 2009

Carbon Market Program (CMP)Funding sources: Governments of Austria, Finland, Japan, Luxembourg, Spain, and Switzerland

• In 2009, the Technical Support Facility supported more than 65 projects and about 50 CDM project opportunities were identified

Energy for AllFunding sources: Governments of Austria, Denmark, Japan, and the Netherlands

• Supported ADB’s efforts to maximize access to energy for the poor, which has led to ADB investment of $1 billion in energy access projects in 2011 and $955 million in 2010

Asia Pacific Carbon Fund (APCF) Funding sources: Belgium, on behalf of the Flemish Region, the Ministry for Foreign Affairs of Finland, the Grand-Duchy of Luxembourg, Fundo Português de Carbono (Portugal), the Kingdom of Spain, Swedish Energy Agency (Sweden), Climate Cent Foundation (Switzerland)

• The APCF and FCF were part of ADB’s Carbon Market Program and cofinance Clean Development Mechanism projects by providing upfront payments against future carbon credits the projects are expected to generate.

Climate Change Fund (CCF) Funding source: ADB

• An allocation of $50 million from ADB’s ordinary capital resources was contributed to establish this special fund

Future Carbon Fund (FCF) Funding sources: Governments of the Flemish Region of Belgium, Finland, Sweden, and the Republic of Korea

• As of August 2012, FCF’s portfolio includes 34 projects which are expected to deliver 12.5 million Certified Emission Reductions with an expected investment of $92.7 million.

Asia’sLow-

CarbonFuture

Strategy 2020

1995 2000 201420102009

STRATEGICFRAMEWORK

ENERGY POLICIES

PROGRAMS AND

INITIATIVES

FINANCINGFACILITIES

CE INVESTMENT TARGET

ADB’s Policy Initiatives for the Energy SectorMay 1995 Energy 2000: Review of the Energy Sector Policy of ADB ADB’s Energy Policy 2009

Asia Least-Cost Greenhouse Gas Abatement Strategy (ALGAS) Project

1995–2000

Clean Development Mechanism Facility 2003–2006

Technical Support Facility2007–onward

Clean Energy Program (CEP)2010–onward

Carbon Market Program (CMP)2006–onward

Energy for All (EfA) 2008–onward

$1 billion $2 billion

Clean Energy Financing Partnership Facility (CEFPF)2007–onward Climate Change Fund (CCF)

2008–onward

Future Carbon Fund (FCF)2008–2015 (or 2023)

Leverage

Connect

Deliver

Moving the Poverty Reduction Agenda Forward in Asia and the Pacific 2001–2015

Promotion of Renewable Energy, Energy E�ciency,and GHG Abatement Projects (PREGA)

2000–2007

Energy E�ciency Initiative (EEI)2005–2009

Renewable Energy, Energy E�ciency, and Climate Change Program (REACH)2001-2009

Asia Pacific Carbon Fund (APCF)2007–onward

($ b

illio

n)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Progress toward ADB's $2 Billion Clean Energy Investment Target

Evolution of ADB’s Clean Energy ProgramADB’sthrusttowardcleanenergydevelopmentbeganintheearly1990swhenitprovidedfundamentalpreparatorysupporttohelpitsdevelopingmembercountries(DMCs)mitigategreenhousegas(GHG)emissions,basedonADB’sPolicyInitiativesfortheEnergySector,whichaimedtointegrateenergyandenvironmentforsustainabledevelopment.Thenin2005,ADBlauncheditsEnergyEfficiencyInitiative(EEI)toexpandADB’sCleanEnergyProgram(CEP)andincreaseitsinvestmentincleanenergyprojects(witha$1billiontargetincleanenergyinvestmentstartingfrom2008).Aftercleanenergyinvestmentsreached$1.75 billionin2008and$1.3billionin2009,ADBcontinueditseffortstomitigateclimatechangebyexpandingitscleanenergyportfolio.ThenewEnergyPolicy,approvedin2009,affirmedADB’scleanenergyagendabyofficiallyscalingupADB’sannualcleanenergyinvestmenttargetto$2billionfrom2013.Thistargetwasmetaheadofschedulein2011.

FromfundamentalpreparatorysupporttoDMCs,tomainstreamingcleanenergydevelopmentinitsoperations,theCEPhasevolvedtobecomethecohesiveprogramthatencompassesandguidesADB’sinvestments,initiatives,andplanofactionforgreener,low-carbongrowth.Itidentifiesconvergencesincleanenergydevelopmentandenergysecurity;renewableenergyandincreasingaccesstoenergy;andbetweentheenergyandthenonenergysectors.

Leveraging Clean Energy ProjectsTheCEPleveragescleanenergyprojectsthroughdifferentinnovativefinancingfacilitiesandsupportsinstrumentsthat(i)aggregatemarkets;(ii)promotelarge-scale,low-carbontechnologytransferanddeployment;and(iii)provideinnovativefinancing.Italsoputsmuch-neededemphasisforimprovingenergyefficiencyfromthedemandsideinthenonenergysectors.

Source:ADBdatabase.

ADB’s Clean Energy Investment Portfolio (2009–2014)

Aggregating markets Asia Solar Energy InitiativeTheAsiaSolarEnergyInitiative(ASEI)aimstoidentifyanddevelopprojectsthatwillgreatlyincreasetheamountofenergythatAsiageneratesthroughsolarresources,helpingreducethecostofsolarelectricitytoend-consumers,achieving“gridparity”withconventionalpowergeneration.ASEIaimstocatalyze3,000MWofsolarenergyinvestmentsinAsiaandthePacificregionby2013,throughitsinterlinkedcomponentsofknowledgemanagement,projectdevelopmentandinnovativefinancing.

Carbon Capture and StorageADBisworkinginpartnershipwiththeGlobalCCSInstitutetoassistDMCsprepareroadmapsforcarboncaptureandstorage(CCS)demonstrationprojects,policies,andlegalandregulatoryframeworks.Theroadmapswillidentifyandhelpovercomebarrierstocommercial-scaledeploymentofCCSintheregion.

Source:ADBdatabase.

Public$7.9 billion

64%

Private$4.5 billion

36%

Renewable Energy

$7.3 billion59%

Energy E�ciency$4.5 billion

36%

Cleaner Fuel$0.6 billion

5%

Central and West Asia$1.5 billion

12%

Southeast Asia$1.4 billion

11%

Pacific $0.2 billion

1%

Private Sector$4.5 billion

37%

South Asia$3.5 billion

28%

East Asia$1.3 billion

11%

Quantum Leap in WindTheQuantumLeapinWindInitiativewilldevelopcountry-specificroadmapsforlarge-scaledeploymentofwindpower,leadingtoanadditional1gigawattofinstalledwindpowerinprioritycountriesfrom2010to2015,withtotalinvestmentofmorethan$1.0 billionfromADBandothersources.QuantumLeapinWind’sprioritieswillbeinthecountriesofMongolia,thePhilippines,SriLanka,andVietNam.Theseprojectswillprovidereliableelectricitytomorethan5millionpeopleandwillhelpavoidanestimated2milliontonsofcarbondioxideemissionsperyear.

Small Wind InitiativeInthepilotcountriesofMongolia,NepalandthePhilippines,ADBisimplementingatechnicalassistancetoexploreeffectivewaystoutilizeindigenousrenewableenergyresourcestosupplyelectricityandimprovelivingstandardsofpoor,remotecommunitiesthatarenotcoveredbypowergridsbecauseoffinancialdifficulties.

Promoting large-scale, low-carbon technology transfer and deploymentEnergy Efficiency ADBwillsupportdemand-sideenergyefficiencyinterventionswithcustomizedfinancingmechanismsandbydevelopingthemarketforenergyefficiency.Bydoingso,ADBcanleveragemoreprivatefinancingintoenergyefficiencyinvestmentsandintobankableefficiencyprojects,specificallyintheindustrialandbuildingssectors.

Low-Carbon Technology ExchangeADBwillestablishanassistedbrokermodelforproactiveidentificationofpartnershipsbetweenwillingbuyersandsellersoflow-carbontechnologiestofacilitatetransferandrapiddiffusionofthesetechnologiesinAsiaandthePacific.Thisexchangewillbethefirsttotargetlow-carbontechnologiesandalargenumberofdevelopingcountries.

Asia Climate Change and Clean Energy Venture Capital InitiativeTheInitiativeseekstoaccelerateprivatesector–basedinnovation,transfer,anddiffusionofclimatechangemitigationandadaptationtechnologies.Itwillprovideanequityinfusiontoseveralventurecapitalfundsandoffervaluabletechnicalsupporttofundmanagerstocatalyzegreaterventurecapitalinvestment.

Clean Energy Activities Toward Outputs, Outcomes, and Impacts (2009–2014)

inputs outputs

ADB Clean Energy Program

$12.4 billion clean energy investments

outcomes

Source:ADBdatabase.

8.9 gigawatts installed renewable energy

capacity

68 million tons CO2 per year abated

21.2 terawatt-hours per year in electricity

savings

Innovative financingClimate Public–Private Partnership FundTheClimatePublic–PrivatePartnershipFundbringstogetherADB,theUnitedKingdom’sDepartmentforInternationalDevelopment,andsomeoftheworld’slargestpublicpensionfundstoadvanceinvestmentstrategiesintacklingclimatechange.TheClimatePublic–PrivatePartnershipFundaimstoreachagoalofmorethan$2billionundermanagementthatwillbedirectedtospurgreengrowthindevelopingAsia.

Renewable Energy CertificatesRenewableEnergyCertificatesareamarket-basedinstrumenttoincentivizecleanenergytechnologybyprovidingaproductionsubsidytoelectricitygeneratedfromrenewablesources,therebyalsopromotingrenewableenergydevelopment.ADBwillalsoprovideassistancetoestablishlegalandregulatoryframeworksforaRenewableEnergyCertificatessystem,whichallowsrenewableelectricitygeneratorstounbundletheenvironmentalattributesofrenewableenergyfromelectricityandmakethemtradableinatradingmarket.

Clean Energy Financing Partnership FacilityTheCleanEnergyFinancingPartnershipFacility(CEFPF)promotesenergysecurityandatransitiontolow-carboneconomiesthroughcost-effectiveinvestments,especiallyintechnologiesthatresultinGHGmitigation.It’sresourcesalsofinancepolicyandinstitutionalreforms,aswellasregulatoryframeworks,thatencouragecleanenergydevelopment.

Climate Change Fund – Clean Energy ComponentTheClimateChangeFund(CCF)investsinprojectsthatleadtoGHGemissionreductionsandcarbonsequestration,andprioritizesinterventionsincleanenergythat(i)helpDMCsachieveenergysecurityandtransitiontolow-carboneconomiesthroughcost-effectiveinvestments;and(ii)providefinancial,policy,andinstitutionalreforms,aswellasregulatoryframeworks,thatencouragecleanenergydevelopmentandenergyaccessforthepoor.

Technical Support FacilityADB’sTechnicalSupportFacilityprovidessupportforfirmsinterestedinparticipatinginthecarbonmarkets.Ithelpsinprojectidentification,developmentandscreeningforviability,validationandregistrationforcarboncrediteligibility,andimplementationandmonitoring.

Future Carbon FundTheFutureCarbonFund(FCF)iscapitalizedat$115millionandwillprovideup-frontcofinancingforADB-financedprojectsthatwillgeneratebeyond2012.TheFCFisfundedbytheGovernmentsoftheFlemishRegionofBelgium,Finland,Sweden,andtheRepublicofKorea.

Seed Capital Assistance FacilityTheSeedCapitalAssistanceFacilityspecificallyassistsselectedprivateequityfunds,venturecapitalfunds,andprojectdevelopmentcompaniestodevelopandoperateinvestmentwindowsdedicatedtoearlystagerenewableenergyand/orenergyefficiencyprojectsinADB’sDMCs.Thisassistancecomesinthreedistinctsupportlines,namely,NewFundDevelopmentSupport,EnterpriseDevelopmentSupport,andSeedCapitalSupport.

Convergence and collaboration with nonenergy sectors TheCEPidentifiesconvergencesandcollaborationswiththenonenergysectorstoimplementdemand-sidecleanenergycomponentsinprojectsinthewater,transport,urban,andagriculturesectors.

Connecting Through Partnerships and Knowledge SharingTheCEPworkstoestablishpartnershipsintheareasofknowledgeandtechnologicaldevelopment,withresearchorganizationsand,asappropriateandfeasible,withcommercialentities,asidefromcollaborationwithotherbilateralandmultilateralinstitutions.Italsosupportsregionaleventsthatfunctionasknowledgeexchangeplatformforbestpracticesinpolicy,finance,andtechnologytocatalyzenecessaryactionwithinDMCs.

Energy for All PartnershipTheEnergyforAllPartnershipisaregionalresponsetoaregionalchallenge.Itprovidesaplatformforcooperation,knowledgeandtechnicalexchange,innovation,andprojectdevelopment,bringingtogetherkeystakeholdersfrombusiness,financialinstitutions,governments,andnongovernmentorganizations.Itisfocusedonaction,withagoaltoprovideaccesstoenergyto100millionpeopleintheregionby2015through(i)promotingexchangeofknowledge,ideas,andinformation;(ii)demonstratingandmainstreamingappropriatefinancingmechanisms;(iii)replicatingandscalingupprovenapproaches;and(iv)buildingpartnershipstodevelop,finance,andimplementaccesstoenergyprojects.

Asia Clean Energy ForumTheAsiaCleanEnergyForum(ACEF)isADB’sannualflagshipevent,whichhascontinuedtobethepremierknowledgesharingplatformforlearningandexchangeofexperiencesonkeyissuesandlatestdevelopmentsincleanenergy.Theannualforumisattendedbyhundredsofparticipantseachyear,andattractsadiversegroupofcleanenergyexperts,includingstakeholdersfromgovernments,nationalandmultinationalbanks,carbonandcleanenergyinvestmentfunds,projectdevelopersandserviceproviders,environmentalregulators,academe,civilsociety,anddevelopmentpartnersandotherinternationalorganizations.

ThoughawiderangeofcleanenergyrelatedtopicsformthediscussionsofACEF,amajorthemeoftheForumhasbeentofocusoncleanenergypolicy.ACEFregularlybringstogetherpolicymakers,regulators,privatesectorrepresentatives,andotherstakeholderstosharetheirexperiences,thinking,andpracticeoncleanenergyregulationandgovernanceinanefforttohelpbuildanimprovedpolicyframeworkforcleanenergyinAsiaandthePacificregion.

Delivering Quantifiable ResultsTheCEPhasannualcleanenergyinvestmenttargetsthatareintendedtocatalyzelargescalecleanenergydevelopmentacrosstheregion.In2013,ADBprovided$2.3billionforcleanenergyinvestments.Theseinvestmentsareexpectedtoresultinsignificantcleanenergygains:atotalof5.2terawatt-hourperyearofcleanpowerfromrenewablesources,suchashydro,wind,andsolar;electricitysavingsof1.9terawatt-hourfromenergyefficiencyand4,691terajoulesperyearfromavoidedconsumptionofdirectfuel;theabatementof7milliontonsofcarbondioxideequivalentperyear;andtheinstallationof1,390MWrenewableenergygenerationcapacity.

Financing a Low-Carbon Future

DespiteincreasingandwidespreadadoptionbynumerouscountriesinAsiaandthePacific,cleanenergytechnologiesstillfacethechallengesofthe“new.”Thesearenewtechnologies,unknowntoregulators,withfewexpertsathand.Theyarenewentriesintotheenergyfield,competingagainstestablishedandwell-testedconventionalsourcesofpower.Mostimportantly,cleanenergytechnologiesrepresentanewkindofthinking—thatofaworldwheregreatereconomicdevelopmentnolongercreatesanequivalentincreaseingreenhousegasemissions.

AscleanenergyisamajorinvestmentpriorityforADB,ithasdevelopedafacilitytoaidcleanenergyinitiativesinovercomingthesechallenges.

The FacilityTheCleanEnergyFinancingPartnershipFacility(CEFPF)wasestablishedin2007withthecoregoalsofincreasingenergysecurityamongADB’sdevelopingmembercountries(DMCs)andassistthemintheongoingtransformationoftheireconomiestolow-carbondevelopment.

How are fund resources accessed?Whilealldevelopingmembercountriesareeligibleforsupportfromcleanenergyfunds,requestsforresourcescanbemadeonlythroughoperationsdepartmentsoftheAsianDevelopmentBank(ADB).Throughthem,projectproposalsaresubmittedtotheClimateChangeSteeringCommittee,throughtheFacilityManagerusingtheapplicationformoftheCleanEnergyFinancingPartnershipFacility(CEFPF)andADB’sstandardconceptpapertemplate.Applicationsarereviewedinsixbatchesandaredueon31 January,31March,31May,31July,30September,and30November.

ADB’sCleanEnergyWorkingGroupreviewsandendorsesprojectproposalsbasedonCEFPF’sImplementationGuidelines,guidedbyCEFPF’sdesignandmonitoringframework,whichwasdecidedthroughanagreementbetweenCEFPF’sfinancingpartnersandADB.TheClimateChangeSteeringCommitteefinallyallocatesresourcestoselectedprojectproposals.FollowingfundallocationfromCEFPF,theapprovaloftheproposedcleanenergyprojectfollowsthenormalADBprocedure.

Foreign Affairs, Trade and Development Canada

Affaires étrangères, Commerce et Développement Canada

Thistransformationneedsallpossiblesupport,technicalandfinancialalike,andCEFPF’sfundscanmakethedifferencewhenacountrychoosesbetweencleanenergyorconventionalpowergeneration.CEFPFexiststobridgethegapbetweenacountry’sdesiretoimplementcleanenergyanditsabilitytoimplementit.Byincentivizingcleanenergytake-up,providingbenefitsupfront,anddefrayingcosts,CEFPFmotivatesDMCstoincreasetheiruseoflow-carbon,cleanenergytechnologies.

CEFPF’sactivitiesarealignedwithADB’sStrategy2020goalofinclusivegrowth;the2009EnergyPolicy,whichsetsdownADB’sfullsupportforcleanenergy;andtheClimateChangeProgram.

From2008to2011,ADBinvestedmorethan$1billionannuallyincleanenergyinvestments.In2012,ADBhassurpassed$2billioninannualinvestments.Thislevelofinvestmentismadepossible,inpart,byCEFPF’sactivities.ItscontinuingsuccessinthecleanenergysectorandhighdemandfromDMCshavecontributedtomakeADBtheleadorganizationinpromotingalow-carbonfutureforAsiaandthePacificregion.

Ascleanenergytechnologiesmustcompeteagainstentrenched,andlessexpensive,conventionalpowersources,CEFPFresourceshelpdefraythehighinitialcostofinvestmentandmakecleanenergymoreviabletoDMCs.CEFPFhassetcriteriafortheprojectsitcanextendsupportto,identifiedas

• projectsthatdeploynewcleanenergytechnology;• projectsthatlowerbarrierstoadoptingcleanenergytechnologies(suchasinnovativeinvestmentsandfinancingmechanisms,andbundlingofsmallercleanenergyprojects);

• projectsthatincreaseaccesstomodernformsofcleanandefficientenergyforthepoor;and

• technicalcapacityprogramsforcleanenergy.

Fund Resources and DonorsTheCleanEnergyFinancingPartnershipFacilityisdividedintothreefunds:

1. TheMulti-DonorCleanEnergyTrustFund,whosepresentfinancingpartnersare•Australia(AustralianAgencyforInternationalDevelopment)•Norway(NorwegianMinistryofForeignAffairs)•Spain(GobiernoDeEspaña)•Sweden(SwedishInternationalDevelopmentCooperationAgency)

2. Thesingle-donorAsianCleanEnergyFundsourcedfromJapan’sOfficialDevelopmentAssistance

3. TheCarbonCaptureandStorageFundestablishedthroughtheGlobalCarbonCaptureandStorageInstitute

4. TheCanadianClimateFundforthePrivateSectorinAsia(CFPS),fundedbytheGovernmentofCanada

ADBworkscloselywithitsfinancingpartnerstomovesignificantlytowardachievingCEFPF’s$250millionfundtarget,especiallythroughreliable,multiyearcommitments.

CEFPFisopentomultilateralandbilateraldonorsandcontinuetoseekpartnerswillingtocontributetowardthepromotionofcleanenergyinAsiaandthePacific.

CEFPF in Support of Clean EnergySixyearssinceitsinception,thefacilityhasallocatedatotalof$148.6milliontocleanenergyprojectsandisexpectedtoleveragenearly$2billioninreturn.Thismeansthatforeverydollarallocatedfromthefacility,ADBinvestedanequivalentof$26incleanenergyprojectsinthedevelopingcountriesofAsiaandthePacific.ThishascontributedtoADB’sstrongcleanenergyinvestmentssince2008.

TechnologiesandactivitiesthatCEFPFhassupportedinclude• biomass/biofuel/biogas;• ruralelectrificationandenergyaccess;• distributedenergyproduction;• waste-to-energyprojects;• demand-sidemanagementprojects;• energy-efficientdistrictheating,transport,streetlighting,buildingsandend-usefacilities

• carboncaptureandstorage;• integratedgasificationcombinedcycleorIGCC,supercriticalandultra-supercriticalsteamtechnologies;

• cleanenergypowergeneration,transmission,anddistribution;• manufacturingfacilitiesofcleanenergysystemcomponents,highefficiencyappliancesandindustrialequipments;

• energyservicecompaniesdevelopment.

AllocationtoinvestmentleverageratiopairedwithCEFPF

insupportofCleanEnergy1:26

$148.6 million CEFPF

$1.8 billionCleanEnergyInvestments

Clean Energy Financing Partnership Facility: Lifetime leveraging numbers as of December 2014

CEFPF=CleanEnergyFinancingPartnershipFacility.

The Facility at Work in the Region

Asperthe2014CleanEnergyFinancingPartnershipFacilityWorkProgram,CEFPFseeksto:

(i) improveaccesstoenergyforthepoorandremoteregions,throughfuelswitchingandavoidingtheuseoftraditionalbiomass;

(ii) increasebothdemand-andsupply-sideenergyefficiency;(iii) promoteuseofandadoptrenewableenergysources;(iv) promoteefficientuseofcoalthroughcleanertechnologiessuchascarboncapture

andstorage;(v) encouragedevelopmentanduseoflowcarbontechnologies,suchasforsustainable

transport;and(vi) leveragegreaterprivatesectorinvestmentsthroughpublic–privatepartnerships.

ThoughCEFPFisexpectedtohelpcatalyze$1.8billionsinceitsinception,thisisadropinthebucketcomparedtotheoverallinvestmentsrequiredinAsiaandthePacificregion.

$2 billion inClean EnergyInvestments

40 new technologies deployed

40 new technologies

deployed

5 new approaches/

methods introduced

27% (17 of 63 total projects) with identified

cobenefits

100% projects lowering barriers

141,733 households

with access toenergy

9 access to energy project (100%) with

gender benefit

TechnicalAssistance

$54.2 million

Clean energy and energy security• Clean energy reduces the

demand for fossil fuels, such as coal and oil, which power conventional generation plants.

• Lower demand eases the upward pressure on energy prices in DMCs.

828.9 megawatts

installedreduction in

emissions

6.5 terawatt-hours energy

savings

Clean Energy Financing Partnership Facility Results ChainActivities Toward Outputs, Impacts, and Outcomes 

Lifetime numbers as of 31 December 2014

7.7 million tCO2/yearemission reduction

GrantComponent

of Investment$94.5 million

Clean energy and emissions reduction• Clean energy displaces

conventional energy, greatly reducing greenhouse gas emissions from energy generation.

• This lowers carbon intensity in developing member countries, or the ratio of CO2 emitted to energy produced.

ALLOCATIONS OUTPUTS IMPACTS/OUTCOMES

TheprojectsthatCEFPF’sresourcessupportareintendedtocatalyzeadominoeffect:byshowingtheviabilityofcleanenergytechnology,theyencouragemanymoreinvestmentsdowntheline.

Example:Aspartofitsrenewableenergyprogram,theGovernmentofBangladeshtargetstheinstallationof100,000solarhomesystemsinhouseholdsthathavenoaccesstogridelectricity.CEFPF’sresourceswillbeusedtosubsidize$50outofthe$400costofeachsolarhomesystem.Buyingdownthepricemakesthesesystemsmoreaffordableforpoorhouseholds.Inthisproject,CEFPFleveraged$20millioninsupportofgreateraccesstoenergythroughrenewablepower.

Deploying new technologies with strong demonstration effectsSpecifictechnologiesCEFPFhassupportedincludesolarphotovoltaic-poweredirrigationsystems,grid-connectedsolar,smartgrid,concentratedsolarpower,variablefrequencydrive,smallhydropower,biomass,waste-to-energy,andcarboncaptureandstorage.

Example:ACEFPF-supportedprojectinQinghai,People’sRepublicofChina,aimstodevelopanovelrenewableenergy-drivenirrigationsystemtoconservepastureland.Theprojectwilldemonstratetheirrigationsystemandrecommendamarket-basedsystemforovercomingthebarrierstoinstitutionalarrangement,financialmodalities,andpolicyand/orregulatoryframeworktoallowthemodeltobereplicatedandscaledupinthefuture.

Example:TopromotethedeploymentofsolarpowergenerationprojectsinIndiathroughprivatesectorinvestments,CEFPFfinancingisbeingprovidedtocoverassistanceinthetechnicalduediligenceprocessofbanksandotherfinancialinstitutions,includingtrainingandassessmentofexistingbanktechnicalduediligenceprocessesforformulationofrecommendationsforimprovements.Thisenablesbankstoprovidelong-termfinancingforsolarpowerprojectswhichiscriticalforviability,sustainabilityandreplicability.

Lowering Barriers to the Adoption of TechnologyBarrierstoinvestmentandthedeploymentofnewcleanenergytechnologiescanbeduetopublicpolicy,thelimitationsofinstitutionalcapacity,financialandeconomicissues,andevensociopoliticalobstaclesthatplacethesetechnologiesatadisadvantageagainstconventionalpowersources.Cleanenergytechnologyisknownforhavingahighinitialcostofinvestment,butotherkeybarriersinclude

• lackofenablingpoliciesandregulations;• inadequateskillsandtrainingtomanufacture,install,maintain,and/orservicethenewtechnologies;

• lackofpublicawarenessandinformationdisseminationoncleanenergy’sbenefitsandpossibilities;

• favoringestablishedenergysystems,ortechnologicallock-in;• failuretointernalizeexternalities,suchasthepollutioncausedbyconventionalenergysourcesandtheenergysecurityissuesthatarisefromadependenceonimportedfossilfuels;and

• limitedaccesstoaffordablecleanenergyfinancingorotherinadequaciesinfinancingoptions.

Example:CEFPFhelpstopromoteregionalcooperationbysupportingtheAsiaCleanEnergyForum,oneofthelargestcleanenergyeventsintheentireregion.The2014forumwasattendedbyover1,500participantsandcoveredabroadrangeoftopicsacross3 days.Distinguishedspeakerssharedlessonslearnedandidentifiedopportunitiesforscalingupinvestmentsolutionsaddressingenergysecurityandclimatechange.Majortopicsofdiscussionincludedinnovativefinancingforcleanenergyprojects,solutionstoenergypovertyusingoff-gridcleanenergysystems,andmethodstoacceleratetechnologytransferanddistributioninAsiaandthePacific.

In ConclusionCEFPFisaplatformforcooperationbetweenADBanditsfinancingpartners.Itparlaysitsfiniteresourcesinsupportofcleanenergytechnologies,initiatives,andprojectswhich,boththepartnersandADBhaveagreed,areworthyoffinancialbackingandcapableofincreasingtheuseofcleanenergyinAsiaandthePacific.ThispartnershipisconstantlywideningasmorepartnerstrustCEFPFastheiradvocateinsupportinglow-carbondevelopment.

ADBaccepts,onanuntiedgrantbasis,contributionstothecleanenergyfundandcleanenergytrustfundsfrombilateral,multilateral,andindividualsources,includingcompaniesandfoundations.

For more information on the facility, contact the Facility Managers:

Gil-Hong KimSeniorDirectorSectorAdvisoryServiceDivision,SustainableDevelopmentandClimateChangeDepartmentAsianDevelopmentBank

Aiming ZhouSeniorEnergySpecialistSectorAdvisoryServiceDivision,SustainableDevelopmentandClimateChangeDepartmentAsianDevelopmentBank

About the Asian Development Bank

ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to the majority of the world’s poor. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration.

Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

Asian Development Bank6 ADB Avenue, Mandaluyong City1550 Metro Manila, Philippineswww.adb.org

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