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ADB to Step Up Private Sector Operations in Vulnerable Countries, Emerging Sectors

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The Asian Development Bank (ADB) will sharpen the focus of its private sector operations on complex, innovative, smaller, and sometimes riskier projects in challenging markets and sectors, and enhance efforts to address climate change and support women under an operational plan that will guide ADB’s nonsovereign assistance over the next five years.

The Operational Plan for ADB’s Private Sector Operations, approved today, notes that a healthy private sector is key to meeting persistent development challenges. In Asia and the Pacific, these include financing gaps that thwart the construction of modern infrastructure, slow the creation and growth of businesses, and suppress household savings by excluding poor communities and particularly women from the banking system.

“ADB’s private sector operations will lead by example to bridge these gaps and meet the challenges of our rapidly changing region,” said the Director General of ADB’s Private Sector Operations Department Mr. Mike Barrow. “We will champion new products, financing structures, and companies, and expand our work in emerging sectors such as agribusiness, education, and health, while sharpening our already substantial focus on addressing climate change. We will redouble our efforts in countries facing unique development challenges like those in fragile and conflict-affected situations and small island developing states, and will focus heavily on investments that benefit women.”

A larger share of private sector projects will be higher risk, innovative, and strongly developmental. Smaller projects with high development impact will be encouraged. To manage risks and ensure financial sustainability, lending and investment decisions will be based on a thorough understanding of risks and rewards. Smaller deal sizes and a more diverse range of countries, sectors, and clients will help to manage portfolio risk.

“ADB will prioritize development impact and pursue quality of investment over volume while managing risk effectively,” said Mr. Barrow. “This is vital in our renewed focus on the region’s most vulnerable countries, where smaller and perhaps riskier projects in areas like tourism or agribusiness can have an outsized development impact.”

Private sector operations will support the priorities of ADB’s Strategy 2030. The operational plan’s core sectoral objectives include clean energy, environmental infrastructure such as waste management, low-carbon transport, accessible information and communications technologies, agribusiness, quality education and health services, and a vibrant financial sector. ADB will build initiatives to support the incubation of cutting-edge technologies for the region.

Loans and guarantees will remain principal instruments, but the nonsovereign product range will be revamped. Local currency financing will expand to constitute most private sector financing by the end of the five-year period. Equity investments are targeted to double, and support will increase for public–private partnerships including advisory services provided by ADB’s Office of Public–Private Partnership. Expanded partnerships with institutional investors will allow ADB to promote development without distorting local markets, with every dollar in financing for its private sector operations matched by two and a half dollars of long-term cofinancing by 2030.

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ADB Inaugurates Project to Replace Diesel Systems with Solar Hybrid Across Maldives

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The Asian Development Bank (ADB) and the Environment Ministry of the Maldives have inaugurated the implementation of a solar–battery–diesel hybrid system in 48 islands under the flagship Preparing Outer Islands for Sustainable Energy Development (POISED) Project to help the country tap solar power and reduce reliance on costly, polluting diesel.

The POISED Project aims to transform existing diesel-based energy minigrids into hybrid renewable energy systems in 160 inhabited islands of the atoll nation, out of which installations on 48 islands spread across 8 atolls have been commissioned. The project has been achieving this by investing in solar photovoltaic (PV) power plants, battery energy storage systems, energy management systems, and efficient diesel generators, as well as distribution grid upgrades to allow future renewable energy penetration.

“The POISED project—one of the largest energy sector interventions in the Maldives—will introduce sustainable energy in the outer islands as well as help reduce the cost of energy, minimize CO2 emissions, achieve considerable fuel savings, and reduce the burden on the government budget,” said the Director of ADB’s Energy Division for South Asia Mr. Priyantha Wijayatunga.

Mr. Wijayatunga, Minister of Environment Mr. Hussain Rasheed Hassan, and Minister of National Planning and Infrastructure Mr. Mohamed Aslam were among those taking part in a ceremony to inaugurate the project in Malé.

The Maldives is the first country in South Asia to achieve 100% access to electricity. Each inhabited island was electrified with its own diesel-powered grid system that was old and inefficient, resulting in expensive and sometimes unreliable electricity supply. Diesel power is also costly and requires government subsidies in excess of $40 million a year. The 100% diesel dependence of the Maldives makes it completely reliant on oil imports and also makes its carbon emissions per unit of electricity among the highest in the region. Project installations were able to prove that the optimally designed solar–battery–diesel hybrid systems could significantly lower the power generation cost compared to existing options.

The project already installed approximately 7.5 megawatt peak (MWp) of solar PV facilities, 5.6 megawatt-hour (MWh) of battery energy storage systems and 11.6 megawatts of energy-efficient diesel gensets, while also upgrading distribution grids in 48 islands. The overall project will target a minimum of 21 MWp of solar PV installations. This will cater for an annual demand of 27,600 MWh, accounting for a reduction of 19,623 tons of CO2 emissions annually.

The POISED Project, approved in September 2014, is supported by $55 million in grants from ADB—$38 million from the Asian Development Fund, $12 million from the Strategic Climate Fund (SCF), and $5 million from the Japan Fund for the Joint Crediting Mechanism (JFJCM)—and $50 million loan from the European Investment Bank (EIB). All the contracts under ADB for SCF have completed installations, while installation under JFJCM is currently in progress. Disbursements under EIB funding have commenced and EIB funds would be used for most of the remaining smaller islands.

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IRENA and UAE Ministry of Energy and Industry Sign MoU to Cooperate on Renewable Energy

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photo:IRENA

The International Renewable Energy Agency (IRENA) today signed a memorandum of understanding (MoU) with the United Arab Emirates (UAE) Ministry of Energy and Industry, to cooperate in the field of renewable energy and drive an accelerated shift to low-carbon energy sources.

The MoU was signed in by IRENA Director-General Francesco La Camera and Undersecretary of the UAE Ministry of Energy His Excellency Dr. Matar Hamed Al Neyadi in the presence of UAE Energy Minister His Excellency Suhail Al Mazrouei, during Abu Dhabi Sustainability Week

H.E. Suhail bin Mohammed Al Mazrouei, Minister of Energy and Industry, said that signing of the MoU with IRENA comes in line with UAE’s vision and the direction of the UAE’s wise leadership aimed at promoting sustainable development in the UAE, enhancing the use of renewable energy, as well as supporting and developing relevant policies and organisational frameworks.

H.E. Minister Mazrouei added that the MoU is aimed at promoting the exchange of  open data and allowing the UAE to learn new ideas and benefit from best practices in the field of renewable energy. He said these efforts are aimed at achieving the UAE Vision 2021 objective of creating a sustainable environment in the UAE.

IRENA Director-General Francesco La Camera said: “The case for renewable energy in the UAE and across the Gulf is unquestionable. Today, solar and wind are the country’s most cost-effective sources of new power generation – contributing to growth, economic diversification and sustainable development in the Emirates.”

 “This agreement marks a further strengthening of the Agency’s close relationship with the UAE government as it charts a new course of energy leadership into the 21st century,” continued Mr. La Camera. “Together with the Ministry of Energy, IRENA will work to explore the full potential of the UAE’s vast and diversified energy resources.”

For his part, H.E. Dr. Matar Hamed Al-Neyadi, Undersecretary of the Ministry, said that the aim of this MoU is to organize and maximize cooperation between the Ministry and IRENA’s general secretariat in order to deliver benefits to both parties.

The agreement aims to strengthen and enhance cooperation and the existing business relationship between the UAE Ministry of Energy and Industry and IRENA to develop knowledge products, conduct analysis, exchange information and organize workshops on renewable energy.

Cooperation between the two parties includes the following:

The development of a UAE renewable energy road map, taking into account UAE’s characteristic demand for air-conditioning and associated technology

Support with renewable energy dissemination policies, both current and planned, intended to support deployment of renewables

Electrical interconnection and energy exchange plans and procedures intended to enhance integration of variable and renewable energy, as well as the impact of renewable energy on the stability of transmission networks together with possible technical and operational solutions in this regard.

Under the MoU the two partners will exchange quantitative information on data, statistics, costs, benefits and analytical information related to renewable energy technologies and policies. Best practice in financial instruments and regulatory measures including energy efficiency, market design, system flexibility and long-term planning for a high shares of renewable energy will also feature.

IRENA

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Who turned up the temperature? Climate change, heatwaves and wildfires

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The cautionary tale of the boiling frog describes how a frog that jumps into boiling water will save itself by jumping straight out, but the frog that sits in the water while it gradually gets hotter and hotter will boil to death. The global warming crisis surrounds us today and we must act now to protect ourselves.

On 15 January 2020, the World Meteorological Organization confirmed that 2019 was the second hottest year on record after 2016, according to the organization’s consolidated analysis of leading international datasets.

Average temperatures for the five-year (2015–2019) and ten-year (2010–2019) periods were the highest on record. Since the 1980s, every decade has been warmer than the previous one. This trend is expected to continue because of record levels of heat-trapping greenhouse gases in the atmosphere that has caused our climate to change.

Averaged across the five data sets used in the consolidated analysis, the annual global temperature in 2019 was 1.1°C warmer than the average for 1850–1900, used to represent pre-industrial conditions. 2016 remains the warmest year on record because of the combination of a very strong El Niño event, which has a warming impact, and long-term climate change.

“The average global temperature has risen by about 1.1°C since the pre-industrial era and ocean heat content is at a record level,” said World Meteorological Organization’s Secretary-General Petteri Taalas.

Across 2019, Europe sweltered in its hottest-ever July since records began, causing multiple deaths, closed offices and disruptions to flights and vital services. Wildfires also broke out in the Arctic, with smoke-filled air swirling across a larger-than-ever area of Arctic wilderness.

The heat didn’t let up as the seasons changed across the hemispheres, and Australia’s hottest, driest year on record created dangerously flammable conditions, across wider areas and earlier in the wildfire season, with devastating consequences. Australia’s 2019–2020 bushfire season is already the worst on record, burning 18.3 million hectares by mid-January, causing loss of life, homes, livelihood and the reported death of a billion animals. There are still ten weeks to go before the end of the bushfire season.

“The reality is that this is the world we live in with 1.1°C of warming,” says Niklas Hagelberg, a United Nations Environment Programme (UNEP) climate change expert. “These record temperatures, record heatwaves and record droughts are not anomalies but the wider trend of a changing climate. We can only expect worsening impacts as global temperatures rise further.”

As fires continue to smolder across the remains of Australia’s devasted communities, and threaten yet more new ones today, and as Australia, a well-resourced country used to seasonal bushfires, continues to receive international support to face the challenges of the weeks of the remaining bushfire season, it appears that we are woefully underprepared to face our future reality.

UNEP’s Emissions Gap Report 2019 reported that on the current path of carbon dioxide emissions, if we rely only on the current climate commitments of the Paris Agreement, and they are fully implemented, there is a 66 per cent chance that warming will rise to 3.2°C by the end of the century.

“Governments, companies, industry and the public in G20 countries, who are responsible for 78 per cent of greenhouse gas emissions, must set targets and timelines for decarbonization,” says Hagelberg. “We must embrace the potential and opportunities of a world powered by renewable energy, efficiency technologies, smart food systems and zero-emission mobility and buildings.”

2020 is the year that governments will meet to take stock of and increase the ambition of their commitments to climate action. It is the year that global emissions must drop by 7.6 per cent and by 7.6 per cent again every subsequent year until 2030 in order to limit global temperature rise to 1.5°C.

Before extreme weather events push more communities and ecosystems beyond their ability to cope, in 2020, as a global community we have the means and opportunity to prevent our planet from boiling but need to act now cannot be ignored.

UN Environment

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