As stated by the ADB, the proposed TA aims to advance innovative clean energy development solutions to strengthen energy security and resilience across Asia and the Pacific. It will:

(i) identify and assess innovative clean energy technologies, business models, and financing solutions;
(ii) support governments in strengthening enabling energy policy and regulatory frameworks;
(iii) improve access to high-quality data, knowledge, and analytical tools for evidence-based decision-making.

The TA will also strengthen institutional and technical capacity through structured capacity building program and regional and global knowledge-sharing platforms, including support to the Asia Clean Energy Forum (ACEF) and other international forums. These interventions will contribute to the development of knowledge-based solutions that enable ADB's developing member countries (DMCs) to diversify their energy portfolios and accelerate the adoption of clean energy, thereby supporting universal access to affordable, reliable, sustainable and modern energy services.

PROJECT RATIONALE AND LINKAGE TO COUNTRY/REGIONAL STRATEGY

Asia and the Pacific is the world's largest center of energy demand, accounting for 41% of global energy consumption and 46% of global energy-related emissions. The region's energy mix is 20% more carbon-intensive than the global average, making accelerated clean energy development critical to achieving global net-zero goals. Despite strong progress in renewable energy deployment, fossil fuels remain the backbone of the energy sector, with coal providing about half of the region's primary energy supply in 2020, followed by crude oil (20%) and natural gas (10%). This structural dependence has led to a 151% increase in energy-related emissions between 2000 and 2023, driven by rapid industrialization, urban expansion, and rising energy demand from steel manufacturing, logistics, and digital infrastructure. At the same time, heightened geopolitical instability is intensifying energy security risks, as most countries in the region rely heavily on imported fossil fuels, exposing them to price volatility and supply chain disruptions. Persistent high energy demand growth, continued reliance on fossil fuel-based generation, heavy dependence on imported fuels, and the dominance of hard-to-abate industries underscore the scale and complexity of decarbonizing the region's energy systems. However, reducing reliance on fossil fuels while maintaining energy security, resilience, affordability, and inclusivity remains a major challenge for developing economies in the region.

First, technological barriers persist. Emerging clean energy technologies such as digital and smart grid systems, scalable clean cooking, cooling, and heating solutions, advanced energy storage systems, and AI and digital twin technologies, offer promising pathways to build a cleaner, more flexible, and climate-resilient energy system. Yet despite growing interest, these solutions are not yet commercially viable at scale, particularly for large industrial or utility-level applications, due to limited demonstration projects, and underdeveloped innovation ecosystems.

Second, financing barriers further constrain the adoption. The high upfront cost of clean energy infrastructure and grid modernization required innovative financing solutions and business models to mobilize private sector participation at scale. Some countries have already introduced mechanisms such as blended finance platforms, contract-for-difference schemes, performance-based revenue models, grid-as-a-service, to de-risk investments and accelerate private capital mobilization. However, such instruments remain limited in most DMCs, resulting in financing gaps and slow deployment of clean technologies.

Third, policy and regulatory barriers hinder the enabling environment for clean energy development. Some countries have established clear and predictable frameworks, such as energy efficiency obligation schemes, emissions trading schemes, special act on offshore wind power deployment, and energy storage system auctions, which successfully attract private investment and accelerate clean energy deployment. However, many DMCs still face regulatory gaps, weak enforcement capacity, and limited private sector participation. The absence of such frameworks leads to policy uncertainty, investor hesitation, and fragmented market development. International experience shows that a comprehensive and well-sequenced regulatory framework is necessary to create the right incentives for sustainable clean energy development.

Fourth, institutional capacity and knowledge gaps limit the ability of governments, regulatory authorities, and energy utilities to plan and implement, and scale up clean energy development. In many DMCs, institutional capacity for policy design, project preparation, and technology assessment remains limited, particularly for emerging and advanced clean energy solutions. Addressing these gaps requires structured capacity development programs, knowledge-sharing platforms, and collaboration with research institutions and industry associations to disseminate good practices, demonstrate successful use cases, and strengthen the ability of public institutions to formulate credible strategies, investment roadmaps, and regulatory frameworks.

The proposed TA will address the identified gaps by:

(i) assessing innovative clean energy technologies, business models, and financing solutions to enhance their scalability and bankability;
(ii) strengthening enabling policy and regulatory frameworks that sustain clean energy investments;
(iii) enhancing the institutional and technical capacity of governments, regulators, and utilities for effective and resilient energy planning; and
(iv) disseminating knowledge, data, and best practices on clean energy solutions.

The TA is fully aligned with the core principles of ADB's Energy policy, which emphasize securing energy for inclusive and prosperous development, building a sustainable and resilient energy future, and promoting good governance and private sector participation in the energy sector. It also supports the strategic focus on climate actions under ADB's Strategy 2030 Midterm Review, which calls for solutions-oriented approaches to address climate risks, accelerate the low-carbon transition, and strengthen institutional capacity for energy innovation.

ADB Team Leader:

Kee-Yung Nam
Email: kynam@adb.org 

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