THE ASIAN Development Bank (ADB) partnered with the Philippines and Indonesia to launch an energy transition mechanism (ETM) which aims to fund the early retirement of coal-run power plants and replace them with renewable energy alternatives.
“The time for debate and merely discussing climate change theories is over. Today, we are focusing on applied solutions and workable programs to quickly reduce greenhouse gas emissions. We have a planet to save and we do not have much time to do it,” Finance Secretary Carlos G. Dominguez III said at the launch of the ETM Southeast Asia Partnership in Glasgow, Scotland.
Mr. Dominguez heads the Philippine delegation to the 26th United Nations Climate Change Conference of the Parties (COP26).
He said the Philippines has an opportunity to pilot the ETM facility in Mindanao, where the Agus-Pulangi hydropower plant is being rehabilitated. As Agus-Pulangi power plant increases its generating capacity, the government can gradually purchase coal-fired power plants in Mindanao and repurpose them through the ETM facility, the Finance chief said.
“Mindanao will showcase an Earth-friendly future that can be replicated in other areas in the Philippines — and even countries around the world… Together with the Asian Development Bank, the Philippines is pioneering an innovative model that will set a global standard in transitioning to a cleaner energy future,” Mr. Dominguez said.
The ETM is a public-private finance vehicle which has the potential of accelerating the retirement of coal plants by at least 10 to 15 years on average, he added.
The ETM’s pilot phase is expected to last for two to three years.
Throughout the pilot, ADB targets to raise enough funds to speed up the retirement of up to seven coal plants and channel investments in alternative clean energy options in both countries.
Under the partnership, the multilateral lender will work with government stakeholders to pilot the ETM in their respective countries.
The ETM is made up of two multibillion-dollar funds, with one focused on early plant retirement, while the other one devoted to new clean energy investments in power generation, storage, and grid upgrades.
“It is envisioned that multilateral banks, private institutional investors, philanthropic contributions, and long-term investors will provide capital for ETM,” ADB said.
According to the bank, the full implementation of the ETM in Indonesia, Philippines and possibly Vietnam, can prevent carbon dioxide emissions by 200 million tons per year. This translates to taking 61 million cars off the road.
“Indonesia and the Philippines have the potential to be pioneers in the process of removing coal from our region’s energy mix, making a substantial contribution to the reduction of global greenhouse gas emissions, and shifting their economies to a low-carbon growth path,” ADB President Masatsugu Asakawa was quoted as saying in a statement. — A.Y.Yang