The Asian Development Bank (ADB) and the Global Energy Alliance for People and Planet (GEAPP) announced a new capital fund to accelerate clean energy access and transitions in countries across South and Southeast Asia
GEAPP will provide an initial US$35 million of catalytic capital towards the fund, which will be established and administered by ADB and will focus on nations including India, Indonesia, Vietnam, Pakistan, and Bangladesh.
With this partnership ADB and GEAPP aim to address the challenges of climate change and energy access and transition in Asia and beyond. Priority programs will include supporting Battery Energy Storage System (BESS) in Vietnam, and the early retirement of coal-fired power plant initiatives in Indonesia.
Opportunities will be supported through technical assistance, grant components for investment projects, and blended concessional instruments to crowd-in additional capital.
“We welcome this support from GEAPP which will help ADB in two of our most important priorities as Asia and the Pacific’s climate bank,” said General Woochong Um, ADB’s Managing Director. “First, expanding clean energy for the 350 million people in our region who have either limited or no access to electricity. And second, catalyzing the transition from coal and other fossil fuels toward clean, affordable, and reliable energy sources.”
Robust economic growth, demographic expansion, and increased urbanisation have accelerated energy demand growth in Asia. Yet a lack of reliable and affordable energy access via traditional electricity distribution systems, paired with high upfront capital costs for advanced technologies and energy storage have hindered the region’s progress to date.
“There are great opportunities to open up clean energy access and transition while addressing climate change yet in 2021 just 8% of financing for energy transition technologies went to low- and middle- income countries (LMICs) – that’s the lowest share in 10 years,” said Simon Harford, GEAPP’s Chief Executive Officer.
“We need to do better and act bolder, knowing we will only meet critical climate goals through collaboration and meaningful capital commitments. GEAPP’s partnership with ADB is a great example of this response – new and additional capital will be mobilised at a ratio of at least 15x at portfolio level to encourage the use of clean energy in the region, underpinned by practical innovation, scalable solutions, and knowledge sharing.”
The new fund will contribute to GEAPP’s 2023 priority of increasing accessibility to clean energy technologies across LMICs by unlocking new finance flows for the energy sector, driving down the cost of clean energy technology, and developing investable projects that unlock additional funding.