We are living in the most climate-vulnerable countries in the Global South that suffer from fossil fuel projects supported by financiers like the Asian Infrastructure Investment Bank. The toxic impacts of these projects not only undermine global climate goals, but also exacerbate the consequences of the coronavirus crisis.

Open letter of APMDD to the AIIB Board and Officers on the 2020 Annual Meeting of AIIB

Dear AIIB Board and Officers,

We are members of the Asian Peoples’ Movement on Debt and Development (APMDD), an alliance of peoples’ movements across Asia fighting for survival, justice, and an end to inequality. We are living in the most climate-vulnerable countries in the Global South that suffer from fossil fuel projects supported by financiers like the Asian Infrastructure Investment Bank (AIIB). The toxic impacts of these projects not only undermine global climate goals, but also exacerbate the consequences of the coronavirus crisis.

While we face the impacts of frequent extreme weather events due to climate change, now we have to deal as well with the impacts of the spread of the virus and the heavy toll of strict quarantine measures on our economies. We need climate-friendly responses both for the Covid-19 pandemic recovery and the climate crisis.

We believe we stand at a point in time when a crucial decision must be made by AIIB: to act in line with its own policies to prioritize investments in clean energy and climate resilient infrastructure to avoid a climate catastrophe. Such a decision will have far reaching consequences in terms of climate mitigation, as well as sustainable and just recovery.

According to the 2019 annual emissions gap report of the UN Environment Programme (UNEP), global emissions must fall by 7.6 percent a year until 2030 to stay within the goal of the Paris agreement: to keep temperature rises within the 1.5C ceiling that scientists say is the safest level to avoid disastrous consequences. Yet, emissions continue to rise because crucial financial institutions, such as AIIB, have yet to go beyond the rhetoric of the Paris goals and continue to invest in coal, oil and fossil gas.

AIIB has yet to come up with a clear strategy on how it plans to achieve its own climate mitigation goals despite pledging in 2017, along with other multilateral development banks, to align its policies and activities with the Paris Agreement. A report by Bank Information Center Europe finds that for every $1 the AIIB has invested in renewables, it has invested at least twice as much in fossil fuels. AIIB also finances fossil fuels through the back door: it currently channels 15 percent of its total spending via indirect lending through financial intermediaries, like infrastructure and private equity funds.

Acknowledging the consequences of production and consumption of fossil fuels to the environment in its 2018 Energy Sector Strategy, AIIB held the door open to fossil fuels by also stating it would consider carbon efficient oil-fired and coal-fired power plant if these will replace existing less efficient capacity, or if no viable or affordable alternative exists in specific cases. It also stated that it will consider the “development, rehabilitation and upgrading of natural gas transportation (including storage) and distribution networks to foster greater use of gas during the transition to a less carbon-intensive energy mix, especially in Asia.

In September 2017, the AIIB Board approved a US$150 million investment in the Emerging Asia Fund (EAF). The most controversial project under the EAF is the USD 20M expansion of Shwe Taung Cement Company’s plant in Myanmar’s Mandalay Region. The expansion involved the investment in a new kiln that aims to increase production capacity from 1,500 to 4,000 tons per day of cement material, which translates to a substantial increase in the volume of coal burned and greenhouse gases emitted.

Another project that features prominently in the EAF portfolio is its 2016 investment in Summit Power International, a Singaporean holding company which operates 13 power plants in Bangladesh — all of which run on oil and liquefied natural gas.

In 2018, the AIIB approved a capital investment of USD 100 million for India’s National Investment and Infrastructure Fund. Groups across India have raised concerns over a significant risk associated with the NIIF: its mandate of reviving long-stalled public infrastructure, particularly coal, power, petroleum, railways and road projects.

This is a huge disappointment for a post-Paris financial institution that promotes itself as a leader in clean and green infrastructure finance.

We ask AIIB to end all fossil fuel investments immediately, close the loopholes in its financing policies in order to end high-carbon investments and truly prioritize the transition to renewable energy, and end partnerships with governments, multilateral agencies and private firms that invest in dirty energy.

We ask AIIB Board and Officers to make good on AIIB’s “lean, clean, and green” mandate and bring development in the Global South without harming the lives of those it wishes to bridge out of poverty.

Signed,

Members of the Asian People’s Movement for Debt and Development (APMDD)

  • All Nepal Women’s Association (ANWA)
  • Bangladesh Krishok Federation
  • Bangladesh Jatiyo Sramik Jote
  • Bulig Visayas, Philippines
  • Campaign for Climate Justice Nepal
  • Center for Environmental Justice (CEJ), Sri Lanka
  • Civil Society Women Organization (CSWO) Meghalaya, India
  • CLEAN (Coastal Livelihood and Environmental Action Network), Bangladesh
  • Climate Watch Thailand
  • Community Development Library, Bangladesh
  • Debt Watch, Indonesia
  • Digo Bikas Institute, Nepal
  • Environics Trust, India
  • EquityBD, Bangladesh
  • Fishworkers Union, India
  • Focus on the Global South (Regional)
  • Freedom from Debt Coalition (FDC), Philippines
  • GEFONT Trade Union Federation, Nepal
  • GITIB, Philippines
  • Himalaya Niti Abhiyan, India
  • Human Rights Alliance, Nepal
  • Indian Social Action Forum (INSAF), India
  • Institute for Essential Services and Resources (IESR), Indonesia
  • Jagaran, Nepal
  • JATAM, Indonesia
  • Kerala Independent Fishworkers Federation, India
  • KRUHA - Peoples Right to Water Coalition, Indonesia
  • LDC Watch
  • Migrant Forum in Asia (Regional)
  • mines minerals People (mmP), India
  • Monitoring Sustainability of Globalisation (MSN), Malaysia
  • NadiGati Morcha, India
  • National Federation of Hawkers, Bangladesh
  • National Hawkers Federation, India
  • National Labour Academy, Nepal
  • Oriang, Philippines
  • Our Rivers, Our Life, Philippines
  • Pakistan Fisherfolk Forum
  • Pakistan Kissan Rabita Committee
  • Philippine Movement for Climate Justice (PMCJ)
  • River Basin Friends, India
  • Rural Reconstruction Nepal
  • Sanlakas Philippines
  • SawitWatch, Indonesia
  • Solidaritas Perempuan, Indonesia
  • SAAPE - South Asia Alliance for Poverty
  • Eradication (Regional)
  • SEAFISH for Justice, Philippines
  • SUPRO, Bangladesh
  • Task Force Detainees of the Philippines
  • Trade Union Policy Institute, Nepal
  • UnnayanOnneshan, Bangladesh
  • VOICE, Bangladesh
  • WALHI – Friends of the Earth Indonesia
  • WomanHealth Philippines
pdfOpen letter of APMDD to the AIIB Board and Officers on the 2020 Annual Meeting of AIIB