24 July 2014: The ‘2014 Annual Evaluation Review (AER)’ of the Asian Development Bank (ADB) reviews ADB’s 2013 operational performance, features a chapter focused on its energy operations, and examines the dichotomy between green and brown growth in the Asian region. Overall, the AER finds that, while growth in many Asian countries is “threatened by high pollution levels, climate change, resource depletion and growing social inequality,” growth does not have to come at the expense of environmental sustainability.

Chapter 4, titled ‘ADB’s Energy Operations — Their Sustainability and Inclusion,’ finds that while the ADB’s energy portfolio has thus far been one of its best-performing programmes, many factors are to be taken into account as the Bank shifts to a more sustainable and climate-friendly portfolio. As its composition has increased in the share of renewable energy and energy efficiency (up to 27% in 2009‒2012 from 5% in 2001‒2008), the AER finds that the portfolio is “substantially more capital intensive per unit of energy supplied-or-saved.” However, the chapter goes on to point out that the emissions mitigation “per unit of total power investment mobilized by ADB lending has almost quintupled.”

The chapter also examines the trade-offs between energy access, affordability and security and overall environmental sustainability. Trade-offs can be mitigated by reforming energy prices (such as through the elimination of fossil-fuel subsidies), financing sustainable growth and spurring technological innovation. It concludes that so far no evidence has been found that ADB’s shift is having negative effects on projects’ financial/institutional sustainability or success rate, but cautions that the shift is still recent and evaluations of new projects will be needed.

The report was authored by ADB’s Independent Evaluation Department. [ADB Press Release] [ADB Publication Webpage] [Publication: 2014 Annual Evaluation Review]