By Jiten Yumnam, Centre for Research and Advocacy in Manipur (CRAM)
Civil society organizations (CSOs) raised multiple concerns related to the financing of the Asian Development Bank (ADB) during its 58th Annual Governors’ Meeting (AGM), held from 5-7 May 2025 at Milan, Italy under the theme “Sharing Experience, Building Tomorrow”. While Mr. Masato Kanda, new President of ADB, underscored shared priorities in sustainable development, regional cooperation, and economic resilience, the AGM is marked by overt focus on catalyzing private and innovative financing; co-financing with other multilateral development banks (MDBs) for energy transition projects; emphasis on mining of critical minerals; and financing climate change mitigation and adaptation plans. Meanwhile, finalizing the ADB safeguard policies; revising the accountability mechanism; reviewing the energy policy; and addressing the reprisals on ADB-financed projects are the key issues raised by civil society delegates. Developing Full Mutual Reliance Framework of ADB to step up co-financing framework with the World Bank is another concern.
Energy Sector Financing: The ADB AGM focused on financing energy infrastructure projects in pretext of just and sustainable energy by scaling up private finance and other innovative financing solutions, viz, blended finance. Indeed, the session called, “Infrastructure in Changing World: Financing Resilience in Infrastructure Strategies”, stressed the importance of financing renewable energy projects, viz, hydropower projects as clean energy projects in the fragile Himalayas by scaling up private and innovative financing. Priyantha Wijayatunga of the Energy Sector Office insisted that MDBs need to scale up private sector financing, especially blended financing in renewable energy infrastructure. A representative from the global capital community added the hydropower power potential in Nepal and thus the importance of raising financing resources through equities, pension fund, credit ratings, etc.
The overt focus on private sector-oriented energy sector financing, such as hydropower, transmission lines, mega and solar park, has been a concern among Indigenous Peoples (IPs). ADB has been financing large hydropower projects in the pretext of renewable energy and climate change solutions, viz, Tanahu Hydroelectric Project in Nepal, Lower Kopili Hydroelectric Project, and the mega solar power park in Assam, North East India. However, the financing process undermines the land rights and the right to Free, Prior and Informed Consent (FPIC) of affected IPs. Such process has no consideration on the impacts on biodiversity, high seismicity, fragility of the geology, and of climate change. Hydropower development lacks rationality in high seismic areas viz in Nepal and across North East India. Indeed, the 1200 MW Teesta III dam in Sikkim was washed out by glacial lake outburst due to climate change-induced rapid melting of Himalayan glaciers in October 2023. Such financing framework is problematic and risk the worsening indebtedness of Nepal, which is already one of the most indebted countries in the world. CSOs called for an energy transition plan that recognizes community rights and the protection of environmental integrity, biodiversity, etc.
Mining of Critical Minerals: ADB’s focus on mining of critical minerals has been one of the topics prioritized during the ADB AGM, amid expression of concern from civil society participants. A session called, “Supporting Critical Minerals to Manufacturing Value Chains”, emphasized the importance of ADB’s role in financing critical mining and to supporting innovative financing for climate smart mining. However, CSOs raised concern on ADB’s focus to support mining, especially impacts on Indigenous Peoples’ land and territories and violations of their FPIC, in addition to the lack of accountability of mining corporations and increased risk of conflict, militarization, and violence in their land and territories. Sukhgerel Dugersuren of OT Watch Mongolia shared challenges with large-scale mining and extractive industries in Mongolia, and stated that ADB’s climate smart mining will only worsen and justify the damage and plunder of land and resources. The land rights of nomadic herders in Oyu Tolgoi, Mongolia were violated by mining companies,
ADB as a Climate Bank: With ADB proclaiming itself as the climate bank, its financing focus on unsustainable energy, extractives, and infrastructures that wrought much harm on land, forest, and water only aggravates the climate crisis. ADB representatives in a session entitled, “Innovative Finance for Asia’s Decarburization”, stressed the importance of private finance in regional energy cooperation projects, such as utilizing power grids toward the decarbonization of Asia, supposedly addressing the growing climate crisis in the region. Furthermore, there on the cross-sectoral nature of energy solution and the creation of an enabling environment for private sector finance and stronger involvement of MDBs. Ryuta Suzuki of Japan Bank for International Cooperation (JBIC) highlighted the agency’s support of transmission lines and networks to promote energy efficiency and stressed the importance of private capital to finance renewable energy projects, transmission lines, and the relevance of Green Bonds, as well as the need for incentives for financial institutions.
Catalyzing the Private Sector: As mentioned multiple times, mobilizing private sector financing remains the key focus of ADB in climate financing and in its energy transition projects. The seminar entitled, “Catalyzing Private Sector Development in Asia and the Pacific—What Role for Multilateral Development Banks?”, discussed policy actions, innovative financing instruments, technical support, and investments that can foster a thriving private sector. Panelists shared diverse perspectives on the evolving role of MDBs in promoting private sector development; building a resilient, market-based economies; increasing private sector participation and investment; and reducing the need for Official Development Assistance (ODA). This is a dangerous path to take. With the decreasing trend of ODA, as well as the decreasing political will to fund climate finance (one that is additional to and separate from ODA), Southern countries and communities will bear the brunt of the climate crisis and the debt that follows.
Call for Stronger Safeguards and Accountability Mechanism: With ADB’s ongoing revision of its accountability mechanism, civil society participants called for a stronger mechanism that could aptly address rights violations in communities. With ADB now financing critical minerals exploration and mining, and its plan to review its energy sector financing, the call to strengthen the accountability mechanism becomes all the more critical. In a session called, “Ground up Perspective on the Effectiveness of ADB Accountability Mechanism and Safeguards Delivery”, CSOs raised concerns on the challenges of limited or non-implementation of ADB safeguard policies and the lack of accountability of ADB-financed projects, such as the mining in Mongolia, hydropower projects in Nepal, and SASEC road projects in North East India, etc.
Concerns were also raised on how ADB responds even when concrete evidence of violations are presented, and in reprisals in conflict and fragile areas. Addressing the eligibility criteria that remains a barrier for access to ADB AM; prevention practices on reprisal and attack on affected communities; and remedial actions in a time-bound manner are other concerns raised toward an effective accountability mechanism. CSO delegates asserted the rightful participation of affected communities and their representatives in policy formulation, such as in revising the energy policy; framing of new policy on mining of critical minerals; and in revising the Accountability Mechanism.
End Reprisals and Protect Communities: Increased reprisals of communities affected by ADB-funded projects, especially in conflict-affected and fragile areas, has been raised consistently in meetings with the ADB Accountability Mechanism and the Safeguards Office. CSO delegates highlighted the prevalence of the culture of impunity, lawlessness, militarization, and geopolitical competitions in areas like India’s North East and several parts of South Asia, where there are increasing cases of reprisals and attacks on communities. For instance, the application of emergency laws, such as the Armed Forces Special Powers Act of 1958; the prolonged denial of justice for violations; and the silencing and repression of civil society, exacerbate instances of reprisals on communities affected by ADB-funded infrastructure projects in Manipur in North East India. Major concerns raised includes the lack of clear policy for protection of communities at risk of reprisal and attack. Thus, participants reiterated the zero-tolerance policy for such cases, especially in politically constrained and authoritarian states, The ADB should also ensure the confidentiality of complainants; strengthen policies to stop reprisals by borrowing countries and thoroughly assess financing risks due to conflict or geopolitical tensions.
Conclusion and Recommendations: ADB is embarking on an aggressive process to finance unsustainable, climate intensive, and environmentally harmful projects. Indigenous Peoples affected by energy projects, critical minerals mining and infrastructure called for stronger recognition of IP rights, including self-determination over their land and resources, honoring FPIC, and defining development alternatives. The ADB should rescind financing of unsustainable, environmentally harmful, climate change intensive projects, viz, hydropower projects, mega solar parks, and mining of critical minerals.
Significant private sector financing for energy transition, climate change solutions, and mining of critical minerals will entail major harm on people and the environment. ADB’s review of its energy policy; framing a policy on mining of critical minerals; full adherence to safeguard policies; and development of a strong accountability mechanism are highly critical to ensure effective and sustainable development, as well as ensure the accountability of donors, corporations, and borrowing countries.
The ADB should remove the eligibility criteria to access the Accountability Mechanism and should ensure the full implementation of the recommendations of the mechanism. ADB should find effective ways to address the concerns and calls of affected communities – define alternatives based on the rightful participation of communities; ensure compliance of the safeguards of borrowing countries; end reprisals; and uphold development effectiveness principles as fundamental criteria for an effective development cooperation. The ADB’s co-financing framework with World Bank through the Full Mutual Reliance Framework need further review to ensure accountability from financing unsustainable projects, including unjust energy and false climate solutions.