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.”