By 2040, Asia and the Pacific will account for two-thirds of global energy growth, driven by rapid economic expansion along with a rising population, industrialization, and digital transformation. The Asian Development Bank is pioneering sustainable and clean energy solutions, helping drive the region’s energy transition and ensure universal access to affordable, reliable, sustainable, and modern energy services.
ADB’s bold energy agenda includes innovative financing, policy support, and regional cooperation. It collaborates with its member countries, development partners, donors, and private sector companies. ADB also engages with civil society to ensure the transition provides tangible and inclusive benefits to everyone.
Priyantha Wijayatunga, Senior Director of ADB’s Energy Sector Office, explains the key principles of ADB’s energy agenda, outlines the role and future of its Energy Policy, and provides examples from the field showing real-world progress toward net-zero.
Priyantha Wijayatunga, Senior Director of the Energy Sector Office, ADB
How is ADB advancing clean energy development across the region?
ADB’s 2021 Energy Policy provides a clear operational framework to prioritize investments in renewable energy, energy efficiency, and in electricity transmission and distribution, among others. It also provides guidance on regional cooperation in all our projects. In 2024 alone, we committed about $3.8 billion to energy projects, with over 80% dedicated to climate mitigation and adaptation finance. This covers mostly transmission and distribution, wind, solar and energy efficiency projects.
ADB has been actively pursuing regional cooperation and integration programs across many regions, particularly in the energy sector.
But our work goes far beyond finance. Through our Country Partnership Strategies, which tailor ADB support – both lending and technical assistance – to development priorities of our developing member countries (DMCs), we help governments design policies that support sustainable energy transitions and economic growth. To maximize private sector investment, we deploy innovative financing tools—like guarantees and risk-sharing mechanisms. Overlaying all this is our steadfast commitment to ensuring our projects adhere to strict environmental and social safeguards.
By combining policy leadership, targeted investments, and partnerships, ADB is supporting and accelerating a fundamental shift toward a cleaner, more resilient energy future for Asia and the Pacific.
How do fossil fuels fit into ADB’s Energy Operations?
ADB has completely phased out financing for coal under its 2021 Energy Policy, having ceased all new coal project investments in 2013.
By combining policy leadership, targeted investments, and partnerships, ADB is supporting and accelerating a fundamental shift toward a cleaner, more resilient energy future for Asia and the Pacific.
While renewable energy is our priority, we recognize that natural gas can serve as a transitional solution in certain circumstances. These include when it directly replaces coal plants, provides critical grid stability when deploying large volumes of intermittent renewable energy, and in regions where renewable alternatives aren’t yet viable. Kazakhstan provides a clear example of this balanced approach. Natural gas plays a lifeline role in ensuring reliable heating during the country’s freezing winters when the mix of renewables isn’t able to meet demand.
How does ADB ensure natural gas projects align with climate goals?
ADB funds natural gas projects only as transitional solutions, aiming for a clear path to decarbonization. Even in these cases, we seek commitments to transition toward cleaner solutions over time, ensuring our support aligns with long-term decarbonization goals while addressing immediate energy security and access needs.
We set specific requirements for financing natural gas projects in our 2021 Energy Policy, and any natural gas project will have to be assessed against our policy. Since 2021, we have financed projects involving natural gas to reduce gas leakages and losses, energy efficiency improvements, and coal-to-gas fuel switching for heating.
For instance, in 2022 ADB approved a loan to India’s northeastern state of Tripura to replace aging open-cycle gas-fired power plants with a highly efficient state-of-the-art combined-cycle power plant which will halve greenhouse gas emissions. This came together with investments in the power distribution network to increase the state’s own power generation capacity and improve efficiency. These investments will also enhance resilience of the power sector against the impact of a changing climate and natural hazards.
How does ADB demonstrate the real-world impact of its clean energy projects?
Since 2020, we have financed projects estimated to have avoided 37 million tons of CO₂ (tCO2) emissions – equivalent to taking about 8 million gasoline-fueled cars off the road for a year. In the same period, renewable energy projects accounted for 20% of our energy investments. These include investments like Viet Nam’s 144 megawatt (MW) wind farm, which is cutting 250,000 tCO₂/year; Lao People’s Democratic Republic’s 600 MW cross-border wind project—Southeast Asia’s largest; Uzbekistan’s Samarkand 1 Solar PV and BESS Project involving installation of 500 megawatt solar photovoltaic and 500 megawatt hour battery storage systems; as well as technical assistance programs for solar-generation site evaluation in Turkmenistan, and diversifying Bhutan’s energy mix through rooftop solar for 1,500 public buildings.
The Lotus Wind Power Project has operated since November 2021 and is now helping diversify Viet Nam’s energy mix.
ADB maintains the highest transparency and accountability standards on the impacts of its projects. This means using measurable results and clear safeguards to ensure every project avoids environmental harm.
Does ADB support community-centered energy projects?
One of the focused areas of ADB energy sector operations is bringing affordable, reliable, sustainable, and modern energy to all. To achieve this ADB needs to explore all available options and one of them is to support community centered energy access projects.
ADB’s commitment to community-driven energy projects can be seen in various initiatives. For instance, the Malalison Island Solar Project in the Philippines features a 50-kilowatt (kW) photovoltaic (PV) system equipped with 273-kW-hour lithium-ion batteries for storage. This project now powers 188 local households and businesses, offering them lower energy prices while bolstering livelihoods and lifting living standards. On a broader scale, the Solomon Island Renewable Energy Project is helping the island nation to transition to sustainable energy. This directly benefits communities as it removes dependence on fossil fuel imports.
Why is regional collaboration important to Asia’s energy future and how is ADB fostering it?
Energy cooperation is critical to tackling common challenges such as energy security and economic resilience. It is difficult for individual countries working alone to transition to clean energy, but cross-border collaboration can unlock economies of scale. This reduces costs, stabilizes renewable energy supply, incentivizes knowledge and expertise sharing, and ensures no country is left behind in the shift to energy sustainability.
ADB has been actively pursuing regional cooperation and integration programs across many regions, particularly in the energy sector. This includes vibrant initiatives under Central Asia Regional Economic Cooperation (CAREC), Greater Mekong Subregional Economic Cooperation (GMS), and South Asia Subregional Economic Cooperation (SASEC).
The road to a sustainable and renewable region is through continued and inclusive dialogue, especially when it comes to communities impacted by ADB operations.
On a subregional scale, ADB is supporting a unified ASEAN Power Grid, which is expected to provide renewable and affordable electricity to over 670 million people across the region, while powering regional growth and creating jobs. ADB President Masato Kanda recently announced the bank’s readiness to commit up to $10 billion to make this vision a reality. This will come with numerous benefits as 80% of Southeast Asia’s current energy is derived from fossil fuels, which bring price swings, supply risks, and rising emissions.
What are the next steps in ADB’s energy operations?
A key milestone for ADB’s 2021 Energy Policy is its scheduled review this year, ensuring the policy remains aligned with evolving strategies, emerging technologies, and the rising energy needs of our DMCs.
ADB will continue to prioritize grid modernization, renewable energy expansion, energy efficiency and regional power integration. Additionally, ADB is also focusing on new initiatives involving new energy sources, hard-to-abate sectors and critical minerals, among others. The 2025 review will reinforce ADB’s mandate to strengthen energy security, affordability, and energy access to deliver economic growth while advancing environmental sustainability. It will explore expanded support for clean energy solutions.
How does ADB engage with civil society?
ADB takes its duty to consult and collaborate with civil society organizations (CSOs) seriously and does this in various ways. ADB’s Civil Society Approach paper outlines an enhanced approach to CSO engagement across three pillars: Increased meaningful CSOs engagement in ADB operations, strengthen knowledge sharing and dialogue, and enhanced support for CSOs engagement in accountability and transparency.
At a policy level, ADB regularly consults with CSOs on the development of key operational policies. In authoring the current Energy Policy, ADB engaged extensively with CSOs as a key development stakeholder. At the project level, ADB is committed to addressing environmental and social risks by applying international best practices through its safeguard policies and standards. This includes adherence to its Safeguard Policy Statement (2009) for projects approved before January 2025, and the Environmental and Social Framework (2024) for projects approved after January 2025, both of which underwent extensive public consultations.
The NGO and Civil Society Center (NGOC) is ADB’s primary point of engagement with CSOs. Its mission is to foster strong collaboration between ADB and civil society to strengthen ADB’s operations. The NGOC conducts outreach with civil society and advises and facilitates engagement with CSOs on policies, country programs, and projects.
In addition to regular meetings with CSOs, ADB is open to discussing and collaborating with all parties, including civil society, academia, governments, and the private sector. We firmly believe that the road to energy security and sustainability in the region is through continued and inclusive dialogue to ensure everyone benefits from this transition—especially communities impacted by ADB-supported projects.