AIIB Reinforces Commitment to Support Members’ Clean Energy Solutions – EQ Mag
The Board of Directors of the Asian Infrastructure Investment Bank (AIIB) has approved an update to the Bank’s Energy Sector Strategy on Nov. 22, 2022. Under the updated Energy Sector Strategy, AIIB will focus its energy investments on supporting its Members to achieve their long-term climate goals and net-zero/carbon neutrality commitments and to accelerate the just transition towards secure, affordable, and sustainable energy access for all.
AIIB’s 2017 Energy Sector Strategy was the first sector strategy developed by the Bank and has been effectively guiding the Bank’s energy sector investments over the past five years. AIIB has provided direct energy sector investments of around USD5.8 billion as of end-2021, as well as sizable indirect investments channeled through funds, on-lending facilities and capital market initiatives which aim to support sustainable development and economic prosperity in Asia and beyond.
“The updated energy sector strategy is fully aligned with AIIB’s Paris Alignment commitment and sets out a clear focus for AIIB to prioritize clean energy solutions and their supporting infrastructure,” said AIIB Vice President for Policy and Strategy Danny Alexander. “In the coming years we will focus our investments to support our members to achieve their low carbon and net zero ambitions and accelerate the just transition to secure, affordable and sustainable energy access for all.”
Today, AIIB Members continue to face significant challenges in gaining access to secure and affordable energy. In 2020, over 730 million people worldwide still did not have access to electricity, of which 120 million were in Asia. The challenge is further compounded by disruptions caused by COVID-19, the energy crisis and geopolitical tensions.
In addition, climate change-related events are threatening billions of lives and economic activities in the most vulnerable economies. To prevent disastrous climate impacts and achieve common prosperity, Asia must take a sustainable energy development path. Recognizing this, governments in Asia and around the world have been raising their commitments as manifested by the scores of net-zero and carbon neutrality pledges since 2020. Yet, a significant finance gap remains to drive this transformation, requiring the international community to step up their support and mobilize resources at all levels.
In this context, AIIB provided an update to its Energy Sector Strategy to reflect the increased focus by its Members and the wider international community on climate change and energy transition. The update is underpinned by AIIB’s vision, mission and institutional goals set out in its 2020 Corporate Strategy. It also aligns with commitments made by AIIB in recent years, particularly to the climate finance target of 50 percent of total approved financing by 2025 and the alignment of investment operations with the goals of the Paris Agreement by July 2023.
The updated Energy Sector Strategy presents a heightened focus for AIIB to support Members’ energy transition by prioritizing renewable energy, energy efficiency, as well as their supporting infrastructure and technology development. These clean energy solutions will together underpin a transformation that will help AIIB Members achieve their aspirations for energy accessibility, security, and affordability. In line with the Bank’s commitment to Paris Alignment, the update also imposes stricter limits on the financing of fossil fuels.
Under the updated Energy Sector Strategy, AIIB’s support to its Members will be guided by the following six principles:
Principle 1: Promote energy access and security.
Principle 2: Support transition to a clean energy system.
Principle 3: Realize energy efficiency potential.
Principle 4: Manage local and regional pollution.
Principle 5: Mobilize private capital.
Principle 6: Promote connectivity and regional cooperation.
In the process of implementing the updated Energy Sector Strategy and fulfilling its mission of Financing Infrastructure for Tomorrow, AIIB will continue to grow its energy portfolio to meet the increasing needs of Members and promote sustainable development and economic prosperity in Asia and beyond.
About AIIB
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is financing the Infrastructure for Tomorrow—infrastructure with sustainability at its core. We began operations in Beijing in January 2016 and have since grown to 105 approved members worldwide. We are capitalized at USD100 billion and Triple-A-rated by the major international credit rating agencies. Collaborating with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.
Source: aiib
