ADBs ENERGY SECTOR OPERATIONS

Anthony Jude Chair, Energy Committee Senior Advisor and Practice Leader (Energy) Regional and Sustainable Development Department March 2014

Outline

Context
o The Development Agenda: Strategy 2020 o ADB Energy Policy in the Evolving Environment

Overview of the Energy Sector

o Volume by Type of Assistance o Greening Evolution of Energy Agenda

Programs and Approaches Role of RSDD

General Business Opportunities

STRATEGY 2020

Development Agenda
o Inclusive Economic Growth
o Environmentally Sustainable Growth (key: Climate Change) o Regional Integration

Core Areas of Operation

o Infrastructure (key: energy)
o Environment

o Regional Cooperation and Integration

o Financial Sector Development

o Education

Mid-Term Review of Strategy 2020 Key Messages

Strategy 2020 remains valid and relevant Vision of an Asia-Pacific free of poverty stays But a sharpening and realigning of operational focus required in light of emerging challenges of the transforming region ADBs capacity also needs strengthening to respond to DMCs needs and demands

Disaster Risk Management/ Disaster Risk Financing

ADB Energy Policy: In the evolving environment

ADBs First Energy Policy (1981): response to the oil crisis

Second Energy Policy (1995): infrastructure investment and developing financially robust and efficient sector operations
Energy Policy Review (2000): reducing poverty, increasing private sector involvement, addressing environment impacts, promoting regional cooperation

Energy Policy 2009

Energy Security
Increasing demand for energy Volatility in energy prices

Climate Change
Significance of global warming and climate change Need to promote low carbon emission options and technologies

Energy Access
MDG targets cannot be met without modern energy for all 2.5 billion people rely on traditional biomass Mobilizing financing is challenging

2009 Energy Policy Objective

To help DMCs to provide reliable, adequate, and affordable energy for inclusive growth in a socially, economically, and environmentally sustainable way

2009 Energy Policy Three Pillars

1.

Promoting energy efficiency and renewable energy Maximizing access to energy for all

2.

3.

Promoting energy sector reforms, capacity building, and governance

ADB Energy Policy: Yes

Prioritize and broaden support for energy efficiency improvements and renewable energy projects
Wide-ranging efforts to provide energy services for inclusive growth
o Accelerate programs to extend energy services to communities and groups o Access to energy is essential to reducing poverty

Promote effective regional cooperation in the energy sector to strengthen energy security

Emphasize promotion of energy sector reforms, capacity building, and governance

ADB Energy Policy: Yes (2)

Encourage private sector participation (and public private partnerships) to enhance efficiency through competition, and to increase investable resources, but not as the end objective of reforms All energy sector investments will comply with ADB safeguards policies regarding the environment, involuntary resettlement, and indigenous peoples

Promote superior knowledge management and dissemination of good practices and lessons learned; support advocacy and assistance to DMCs in technology transfer and deployment

ADB Energy Policy: Yes (3)

Collaborate with a range of development partners

Identify specific situation in each DMC while planning and designing interventions, especially for Pacific DMCs

Monitor policy implementation using results framework

ADB Energy Policy: No

No involvment of financing nuclear power generation No involvment of financing coal mine development except for captive use by thermal power plants, No involvment of financing oil field development except for marginal and already proven oil fields

Energy Sector
Volume of assistance to energy sector is increasing
Energy Sector Approvals, 2007-2013 (in US$ million)

Year

Public Sector Loans

Non-Sovereign Investments

Grants

Technical Assistance

2007
2008 2009 2010 2011 2012 2013

1,166.39
1,363.40 1,908.01 1,865.90 2,896.69 1,943.19 2,879.44

391.02
1,259.08 469.07 848.11 1,461.61 757.74 679.00

25.4
259.9 95.3 215.95 125.70 258.50 459.37

20.80
16.50 32.91 37.26 51.10 29.38 43.37

Energy Sector Assistance, 20072013

5,000.00 4,500.00 4,000.00 3,500.00 3,000.00 2,500.00 1,461.61 51.10 125.70 43.37 459.57 679.00

16.50 259.90
32.91 95.30 1,259.08 20.80 25.40 391.02 1,908.01 1,166.39 1,363.40 469.07

37.26 215.95 848.11

29.38 258.50

Technical Assistance Grants Non-Sovereign Investments

757.74

2,000.00
1,500.00 1,000.00 500.00 2007

Public Sector Loans

2,896.69 1,865.90 1,943.19 2,879.44

2008

2009

2010

2011

2012

2013

Projects by subsector (2001-2013)

Pipelines, 2% Renewable energy, 13% Conventional energy, 20%

Large hydropower, 8%
Energy utility services, 3%

Energy sector development, 8%

Energy efficiency and conservation, 6%

Electricity transmission and distribution, 39%

The Greening" of ADB's Energy Sector Operations

To accelerate low-carbon growth and reduce greenhouse gas emissions in the region, ADB set the following targets:
o $1 billion annual target of clean energy investments, from 2008 o $2 billion annual target of clean energy investments, from 2013

ADB Assistance to CE Investment ( $million)

475.80

2013

2,356.74

4,018.01

2012

700.94

2,358.42 2,959.43 1,731.00 2,132.97

2011 374.30

4,484.00

Clean Energy Invesment in Non-Energy Sectors Total Clean Energy Investment Total Energy Sector Loans

2010

1,756.49

2,929.96

2009

429.37

1,312.63

2,472.38

2008

90.22

1,787.08

2,882.33

Average 2005-2007 -

63.92

695.35

1,456.93 2,000.00 3,000.00 4,000.00 5,000.00

1,000.00

Installed RE Power Generation Capacity (MW), 2008-2013

2,000 1,800 1,600 1,400 1,200 1,000 800 600 1,871

1,481
1,391 1,256

875 683

400 200 2008 2009 2010 2011 2012 2013

Catalyzing Rapid Clean Energy Development

Aggregating Clean Energy Markets
Asian Solar Energy Initiative Quantum Leap in Wind/Small Wind Carbon Capture and Storage

Facilitating Clean Energy Technology Development and Diffusion

Climate Technology and Finance Center
Integrating financing needs Catalyzing climate technology deployment Establishing a pilot marketplace

Supporting Growth Through Clean and Environmentally Sustainable Energy

Energy for All Sustainable Transport Initiative Cities Development Initiative for Asia

New Programs
Small Project Development Facility for Energy for All Projects CCS Center of Excellence Asia Energy Efficiency Accelerator

Progress Toward ADBs $2 Billion Clean Energy Target

2500 2358 2000 1750 1756 1500
$Millions

2357

2133 2000 1800

1600

1313 1400

1000 1000
757 500

1200

657

668

226 0
2003

306

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

CE Investment

CE Investment target

Role of RSDD

An anchor for sector and thematic strategic directions in key areas of ADB's operations A linking service to facilitate cross-fertilization of ideas and experiences between regional departments
A knowledge center for capturing, consolidating, storing, and disseminating knowledge obtained through regional operations and by following international developments

A reference center for the region on regional and international trends in sectors and thematic areas
A center for developing new business areas, and developing and implementing new business concepts

Business Opportunities
Types

Investment projects Technical assistance

Areas

Deployment of new clean energy technology

Projects that lower the barriers to adopting clean energy technologies Projects that increase access to modern forms of clean and energy efficient energy for the poor Technical capacity programs for clean energy

THANK YOU