Civil
society organizations (CSOs) around the world urged the Asian Infrastructure
Investment Bank (AIIB) two days before the start of its 3rd Annual
Meeting in Mumbai, India to fulfill its promise of being ‘green’.
A
year ago in Jeju, South Korea, during its 2nd annual meeting, President Jin
Liqun clearly stated that “there are no coal projects in our pipeline, and we
will not consider any proposals if we are concerned about their environmental
and reputational impact.” However, a year after, AIIB has funded
several fossil fuel projects, including the Trans-Anatolian gas pipeline, the
Bhola IPP gas power plant in Bangladesh and the Myingyan gas power project in
Myanmar.
The
AIIB has also taken its first step in funding coal through its investment in
the IFC Emerging Asia Fund and its indirect financing of a coal mine expansion
in Myanmar. This investment raises significant concern, showing how
investing through third parties, like infrastructure funds, can result in the
AIIB funding coal and other harmful fossil fuels by the back door.
Rayyan
Hassan, executive director of NGO Forum on ADB, a network of 250 organization
across Asia stated that “AIIB has an opportunity to lead the way in sending a
strong signal to financial markets and other development finance actors that
the era of fossil fuels is over. AIIB should take concrete steps to address the
climate crisis, by shifting investments from harmful fossil fuels towards
sustainable renewable energy and to support energy access for poor
communities. He also added that investors of AIIB led infrastructure
funds have an equal responsibility to foster carbon free enery projects”
Luz
Ligthart, NGO Forum on ADB’s AIIB Policy Coordinator said that “AIIB as the
world’s newest multilateral development bank, is in a strong position to forge
a new path post-Paris Agreement and live up to its commitments that its Energy
Sector Strategy (ESS) embraces, and is informed by, the principles underpinning
SE4AL, the 2030 Agenda for Sustainable Development, and the Paris Agreement.”
The
network also expressed that the bank should rule out coal, whether for power
generation or industrial uses, as well as associated facilities such as
transmission lines and railways or ports primarily meant for the transportation
of coal. This includes closing loopholes in financial intermediary lending to
ensure AIIB does not fund coal indirectly.
NGO
Forum also mentioned that the Bank should shift from fossil fuels to
sustainable renewable energy now, “AIIB can send a strong signal to other
development finance institutions and the financial sector by matching the World
Bank's recent commitment to end financing for upstream oil and gas,
establishing a plan to phase out remaining investment in harmful fossil fuels
by 2020, and shifting its investments to sustainable renewable energy, this
should exclude support for large hydro dams that cause extensive social and
environmental harms,” according to Hassan.
Also,
the AIIB should invest on energy access says Sreedhar Ramamurthi, of Environics
Trust, a New Delhi based CSO, “the biggest challenge for reaching SE4ALL/SDG 7
by 2030 is not necessarily generating much greater amounts of energy; it is
getting it to those who need it most.”
JEN
DERILLO-SANTOS
Communications
Coordinator
NGO
FORUM ON ADB
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