SHARM EL-SHEIKH, EGYPT (17 November 2022) — The Energy Transition Mechanism (ETM) facilitated by the Asian Development Bank (ADB) has achieved significant progress since the launch of the ETM Southeast Asia Partnership at COP26.
“Last year, together with Indonesia and the Philippines, we set out to deliver a very ambitious program to accelerate the energy transition in Asia and the Pacific,” said ADB’s Director General of Sustainable Development and Climate Change Bruno Carrasco. “I am proud to report the ETM program has reached a number of significant milestones, moving from concept toward an operational program. And this is only the beginning. As Asia and the Pacific’s climate bank, ADB is committed to ensuring ETM plays an important role in the region’s clean energy transition.”
Mr. Carrasco’s comments came at COP27, which gathered senior officials from developing member countries, donors, and partners from the private sector and civil society organizations.
A broad range of developments over the past 12 months have supported the progress of the ETM program. They include:
- The announcement of a memorandum of understanding this week at the G20 in Bali to explore accelerated retirement of the first privately owned coal-fired power plant under the ETM program, the 660-megawatt Cirebon-1 in West Java. ADB is also in discussion with PLN, Indonesia’s national public power utility, to identify candidate PLN plants for early retirement.
- The launch of the Indonesia ETM Country Platform, led by the Government of Indonesia, and managed by PT Sarana Multi Infrastruktur, to act as the central coordination platform to advance the retirement or repurposing of coal and other fossil fuel powerplants to replace them with clean, renewable energy.
- The recent in-principle approval of $500 million in highly concessional funding to Indonesia under the Climate Investment Funds Accelerating Coal Transition (CIF ACT) program.
- An ongoing feasibility study in the Philippines, including preparation for a CIF ACT application, as well as the commencement of a pre-feasibility study in Pakistan, the fourth country working with ADB on ETM and the first from outside Southeast Asia.
- The establishment of an ETM Partnership Trust Fund that will provide concessional funding to support ETM activities. The trust fund can provide grants and technical assistance, and non-grant instruments such as equity and debt. The Government of Japan provided a $25 million grant earlier this year, and the Government of Germany today announced a €25 million grant (around $26 million) commitment to the trust fund. Discussions are ongoing with other governments for additional contributions.
- The launch at COP27 of ADB’s Just Transition Support Platform which aims to help developing member countries strategically plan, finance, and implement the shift toward net-zero economies. ADB has initiated just transition assessments in India, Indonesia, and the Philippines.
- The start, in Indonesia, of developing Asia’s first-ever national level strategic environmental and social assessment (SESA) for a coal-phase out program.
- Continuous engagement with civil society and nongovernmental organizations on ETM development through the SESA and just transition work.
ETM is a regional, transformative program that seeks to use concessional and market-based funds to retire existing coal-fired power plants on an accelerated schedule and replace them with clean power. ETM is one component of a larger set of initiatives both domestic and multilateral, that aims to help Asia and the Pacific mitigate the worst impacts of climate change, such as extreme sea level rise and destructive weather events.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
