Denouncing Dirty Energy

A probe into ADB-financed energy projects in Asia

Reality of Aid Asia Pacific

February 17, 2022

The Asian Development Bank (ADB) announced that it will be revising its 2009 Energy Policy this year, in order to urgently respond to the climate emergency [1]. Members of the civil society have long demanded the bank to phase out coal power generation, to be aligned with the Paris Agreement and to promote clean energy in the region. Still, several ongoing energy projects remain, which continue to generate adverse impacts on the people and environment, disproportionately affecting the marginalized and vulnerable sectors of society.

Some of these projects include the Nenskra Hydropower Project in Georgia, the Shah Deniz Gas Field Expansion Project in Azerbaijan, the Tangguh Liquefied Natural Gas Expansion Project in Indonesia, the Myingyan Natural Gas Power Project in Myanmar, the Upper Trishuli-1 Hydropower Project in Nepal, the Nam Ngiep 1 Hydropower Project in Laos, and the Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 2 in Mongolia—all of which have inflicted forced displacement, eviction, and demolition, among other human rights and environmental violations.

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Nenskra Hydropower Project

The ADB proposed a reservoir-type hydropower plant with a capacity of 280 megawatts in the Nenskra and Nakra valleys of northwestern Georgia. The place suffers from electricity shortage during the dry winter season as the country depends on oil and gas. The project is said to reduce Georgia’s reliance on imported fuel and improve its hydropower resources.

Shah Deniz Gas Field Expansion Project

The project plans to increase the export of natural gas from Shah Deniz and produce domestic jobs. Currently, the Shah Deniz-II natural gas production and processing facility is already being improved.

Tangguh Liquefied Natural Gas Expansion Project, Indonesia

The Tangguh Liquefied Natural Gas Expansion Project has been operating since 2019, with two trains producing 3.8 million metric tons per annum of liquefied natural gas to sell to Indonesia, China, Japan, Korea, and USA. [2]

Myingyan Natural Gas Power Project, Myanmar

The Myingyan Natural Gas Power Project in Myanmar includes the operation of a 225-MW combined cycle gas turbine power plant. This project claims to supply power and to address outages in Myanmar. [3] Along with the Asian Infrastructure Investment Bank (AIIB), the ADB and the International Finance Corporation (IFC) are also co-financiers of the project.

Upper Trishuli-1 Hydropower Project, Nepal

The Upper Trishuli-1 Hydropower Project is a 216-MW run-of-river hydropower plant on the Trishuli River that generates electricity sold to the Nepal Electricity Authority. [4] This project is in line with the ADB’s partnership strategy with Nepal to grow their economy through investment in energy and transportation infrastructure. [5]

Nam Ngiep 1 Hydropower Project, Laos

As one of the major export hydropower projects in the country, the Nam Ngiep 1 Hydropower Project is a 290-MW generation facility at the Nam Ngiep River in the provinces of Bolikhamxay and Xaysomboun. Over 90% of the generated power will be exported to Thailand, while the remaining ten percent will be used for domestic consumption. [6]

Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 2, Mongolia

Overall, the ADB has disbursed billions of dollars to finance the following energy projects in the region.

Dirty Legacy

The ADB has funded a total of 1,521 energy projects in the Asia Pacific, with 294 still active. [9] Most of these investments include dirty energy and unsustainable development projects, which significantly contribute not only to the worsening climate crisis, but also to further environmental degradation and the erosion of peoples’ rights.

Environmental Impacts

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In Indonesia, construction and operations of the gas project have allowed for gas emissions and the discharge of liquid and solid waste. These have largely contributed to the pollution and loss of biodiversity in West Papua, with the people suffering from the harmful effects. [10]

In photo: Tangguh Liquefied Natural Gas Expansion Project in Papua Barat, Indonesia [11]

In Myanmar, the operation of the Myingyan Natural Gas Power Project degraded the quality of air and water due to the emission of nitrogen oxide and other hazardous components such as sulfuric acid, engine oils, solvents, and hydraulic fluids. Furthermore, the plant is expected to create approximately 758,803.65 tonnes of carbon dioxide-equivalent annually, during the construction and operation of the plant.

In photo: Myingyan Natural Gas Power Project [12]

The Trishuli-1 Hydropower Project in Nepal has also posed threats to safety, as its existence increased the seismic risk in the area. In fact, several households in the wards of the Haku Village Development Committee were destroyed by landslides from an earthquake in 2015, causing at least 60 deaths. While initiatives for resettlement were provided to the residents in the area, the blasting of land has made it vulnerable to further landslides.

In photo: Trishuli-1 Hydropower Project [13]

In photo: Nam Ngiep 1 Hydropower Project [14]

The Nam Ngiep 1 Hydropower Project in Laos affected several endangered animals, including the Lao Warty Newt and the Owston’s Civet, due to the loss of habitat, water contamination, mining, and logging brought about by the facility. [15]

For the Nenskra Hydropower Project, the adverse effects of the reservoir will manifest in the spring, when the ice starts to melt. The difference between the water and air temperature accompanied by strong winds can intensify evaporation, damaging buildings and trees.

In photo: Site of Dam Wall Construction under the Nenskra hydropower project [16]

Massive III, Umid, Ezimkend, and Sangachal—all settlements affected by the Shah Deniz Gas Field Expansion Project—reported the lack of roads and the limited access to resources. The sewage systems are also unsanitary, and soil pollution has affected the capacity to grow crops. Water resources have also been contaminated, decreasing fish stock.

In photo: Shah Deniz Gas Field Expansion Project [17]

Socio-economic Impacts

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Ulaanbaatar Urban Services and Ger Areas Development Investment Program

A public consultation was held with the communities who will be affected by the Ulaanbaatar Urban Services and Ger Areas Development Investment Program in Mongolia. From the consultation, an estimated 555 residential and commercial properties and 2,156 people will be affected by the project. These households expect compensation for the resettlement and land acquisition brought about by the project. The affected communities call for the bank to be transparent in its project implementation by disclosing information, and to remain accountable, by providing an efficient mode to address grievances.

In photo: Ulaanbaatar Urban Services and Ger Areas Development Investment Program [18]

Tangguh Liquefied Natural Gas Expansion Project

The Tanah Merah Village, consisting of the Soway, Wayuri, and Simuna clans, has been relocated for the processing plant. However, only a year worth of basic supplies were given to the residents. Access to their livelihood and resources was also affected, since they were barred from fishing within the zone near Tangguh Project and could not cultivate any land, as the resettlement area does not have sufficient space to do so.

Myingyan Natural Gas Power Project

Water waste from the plant, with an estimated volume rate of 48,000 liter/day, could kill fishes and intoxicate the water sources, which they use for daily consumption and livelihood. Local fisherfolk have already expressed their concern, as they began to notice the decrease in fish catch in 2018. Income has already been scarce due to the displacement of small businesses due to the land acquisition for the project. Villagers have been relying on crops and trees that were removed during the construction. Health and safety is also a concern, as the rainfall in the area may create areas of standing water due to trenches built for the plant. This can increase vector-borne diseases such as malaria.

Upper Trishuli-1 Hydropower Project

The project exceeds the threshold for construction noise exposure, which could potentially harm peoples’ psychological and physical health. Though these risks were known by the bank and its developers, no consultation was conducted with the affected communities. These communities reported that project representatives persuaded them to sell their lands in exchange for cash, a new house, and employment, but the latter has yet to comply with their promises.

Nam Ngiep 1 Hydropower Project

The project caused the forced relocation of 3,458 Lao people, with a majority of the Hmong and Khmu Indigenous Peoples. It has also affected 1,706 livelihoods, contributing to widespread unemployment among affected communities.

Nenskra Hydropower Project

The project will affect the land of 28 vulnerable households and 52 other homes, which accounts for a fifth of the households in Nenskra and Nakra.

Shah Deniz Gas Field Expansion Project

The project could forward the dictatorship of the Azen regime which cracked down on critics and imprisoned 80 political prisoners. Local villagers also expressed their concern about the lack of socioeconomic support. Despite officials promising job opportunities, there were only a handful of locals who were able to get a job.

Probing into the Policy

Due to these adverse impacts brought about by the bank’s 2009 Energy Policy, RoA-AP forwards a CSO Critique on the Asian Development Bank’s Draft Energy Policy. Members of civil society strongly urge the bank to reflect the following principles in its new Energy Policy, to ensure its genuine support towards a low-carbon and climate resilient future for the region:

Alignment with the Paris Agreement
Priority to DMCs meeting their Paris Agreement commitments
Universal energy access
People-oriented approach to the promotion of clean energy
Priority to local players in the energy sector, especially to micro, small, and medium-sized enterprises
“Do no harm” principle
Effective development cooperation principles of democratic country ownership, focus on results, inclusive partnerships, transparency and mutual accountability

The CSO Critique also forwards the following policy recommendations for the ADB, in order for the bank to genuinely respond to the climate crisis:

End all direct and indirect financing for fossil fuels.
Decarbonize ADB’s operations and project portfolios.
Promote universal energy access.
Scale up funding to sustainable renewable energy projects, and take a people-centered approach that ensures a climate safe and equitable future.
Demonstrate commitment to development effectiveness principles.