ADB increases support for energy transition in Asia

Illustrative image (Photo: https://www.thestar.com.my/)

Jakarta (VNA) – A new financing tool that allows Asian governments to force coal-fired power plants to shut down early is set to launch its first project in Indonesia following months of negotiations, according to the Asia Development Bank (ADB).

ADB's senior climate advisor Warren Evans said the bank’s energy transition mechanism (ETM) makes use of private and public capital to refinance investments in coal-fired power plants, allowing power purchase agreements to be shortened and plants to be shut as much as a decade earlier than planned.

Negotiations on the “Cirebon One” project in Indonesia were now on schedule, and talks were also underway to launch a similar project in the Philippines, he said.

This is the first that has ever been done, so there are a lot of challenges and uncertainties to be resolved, but the negotiations are proceeding, he noted.

The mobilisation of climate finance to help developing countries adapt to climate change will be a major theme at COP28 climate talks in Dubai this year, Evans added.

ADB recently launched its Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), a donor-backed guarantee facility allowing the bank to free up billions of USD of capital for loans to climate projects in the region./.

VNA