Despite investing US$605 million in Bangladesh’s energy sector during the last five years, the Asian Infrastructure Investment Bank has reportedly not supported a single renewable energy project, according to experts and environmental activists.
Contrary to its stated commitment to social and environmental issues, the Asian Infrastructure Investment Bank (AIIB) is reportedly promoting the expansion of fossil fuel use in Bangladesh.
The findings were published in a new report “Financing Fossil Fuels Failing Our Future”, by climate activists from the Bangladesh Working Group on External Debt (BWGED) and Coastal Livelihood and Environmental Action Network (CLEAN), Amsterdam-based Recourse, a Filipino NGO Forum at the Asian Development Bank, and Germany’s Urgewald.
They allege that the AIIB did not keep its commitment to offsetting the impacts of climate change and has instead aggravated the issue by investing in fossil fuels in Bangladesh.
Since 2016, the regional bank has reportedly invested a total of $2.39 billion in Bangladesh’s energy sector and has committed to lending a further $2.35 billion. The report also found that on average, its rate of investment in this area is increasing by 23% annually.
Of the funds invested in fossil fuels to date, 80% are said to have gone to supporting the electricity transmission and distribution heads, while 10% have been used to build power plants. The remaining 10% has reportedly been channeled into the oil and gas sector.
“In spite of this level of financing, significantly the AIIB has yet to invest in any RE options (wind, solar) in the country, exposing the bank as an influential financier directly undermining global efforts to protect the climate and community resilience,” said the report’s authors.
They added that as a multilateral development bank, formed after adoption of the Paris Agreement, the AIIB should take a lead in supporting the required renewable energy transition in the region; and that it should be supporting, without exception, renewable and decentralized power options in Asia, especially in climate-vulnerable Bangladesh.
The groups have called upon the AIIB to stop investing in coal and fossil fuel-supporting infrastructures including transportation, transmission and distribution, port development, hybrid plants, and carbon capture, utilization, and storage.
They have also demanded that it support its developing member countries, including Bangladesh, to achieve 100% renewable energy by 2050 at the latest to ensure zero emissions from the energy sector.
Petra Kjell, Campaign Manager of Recourse, said AIIB shareholders like the U.K. have pledged to not provide funds for fossil fuels; however, the bank continues to back them in Bangladesh.
“None of the AIIB’s energy investments in Bangladesh supports renewables. This is unacceptable in a time of climate crisis,” he said.
Professor Shamsul Alam, Energy Adviser of the Consumers Association of Bangladesh added that the bank has breached its own policies by financing transmission lines in Bangladesh which will connect coal-fired power plant to the grid. “The bank should compensate people for its irregularities,” he said.
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Source: pv magazine