NGOs raise concerns about Asian Infrastructure Investment Bank's indirect funding of coal-fired cement plant in Myanmar citing impacts on health, environment & climate
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Author: Bank Information Center Europe; Inclusive Development International
...To live up to its promises to be “green” and to its stated commitment to the Paris Agreement and the Sustainable Development Goals, the AIIB should:
• Match the World Bank’s recent commitment to end financing for oil and gas extraction, and establish a plan to phase out remaining investment in fossil fuels by 2020.
• Set an institutional target for GHG emissions reductions across the AIIB portfolio, and start measuring and publicly disclosing GHG emissions for all its projects and sub projects.
• Prohibit financing of coal for any purpose, including for power generation, for industrial processes and for coal-mining – both via direct and indirect lending.
• Prioritise off-grid, renewable energy projects, and ring-fence dedicated funds to provide energy access for poor and underserved communities.
• Establish a results measurement framework that assesses how the AIIB is performing against SDG7, to ensure access to affordable, reliable, sustainable and modern energy for all, and aligning its finance to the Paris goals.
• Contractually require FI clients to publicly disclose all AIIB sub-investments at the earliest stages, including names, locations, amount of investment and all environmental and social impact documentation, and permit the AIIB to disclose the information on its website. A provision requiring this disclosure of FI sub-projects should be included in the AIIB’s forthcoming Public Information Policy.
• Require FI sub-projects to comply with all AIIB policies, relevant sectoral strategies and guidelines, including the full set of environmental and social standards that apply to direct investments. Ensure FI sub-projects remain accountable to AIIB oversight and due diligence at all stages of the project cycle.
Author: Petra Kjell, Climate Home
"Why is the world’s newest development bank investing in coal despite its green promise?", 21 Jun 2018
…Asian Infrastructure Investment Bank (AIIB)...President Jin Liqun…told last year’s annual meeting that the AIIB “will not consider any proposals if we are concerned about their environmental and reputational impact”, and proudly proclaimed “there are no coal projects in our pipeline”. But a year later, the AIIB has already invested in coal. A report by Bank Information Center Europe and Inclusive Development International reveals how the AIIB’s investment through a financial intermediary has led the institution down a carbon fuelled path.
In September 2017, AIIB backed the IFC Emerging Asia Fund (EAF), which subsequently bought equity in Shwe Taung Cement for expansion of a cement plant in Myanmar. The investment will fund a new kiln to increase production significantly, as well as more than double the output from a coal mine that supplies the plant exclusively…
This back-door investment is a worrying sign that the AIIB may not stick to its green commitments as it prepares to invest $100 billion in new infrastructure projects in Asia and beyond. Asia is on the front line of the fight against climate change…