#Business: Alignment with the energy transition

Commenting on the draft energy strategy, Li Junfeng, head of the National Centre for Climate Change Strategy at the National Development and Reform Commission (NDRC), said that the AIIB should align itself with the global trend towards clean energy. “The World Bank basically doesn’t invest in coal power in China,” he pointed out.

Li said that the AIIB should prioritise renewable energy investments over fossil fuels, particularly in countries currently using little coal and where there may be less resistance to the deployment of renewables. He argues that the AIIB should only give "appropriate" consideration to coal investments using “clean” technology. But Yang thinks value for money needs to be considered, too. Despite falling costs, renewables are typically more expensive to deploy than fossil sources, and often only provide power for domestic and smaller industrial users – not all of Asia’s industry and development needs. Even in China, non-fossil sources of energy will account for only around 20% of primary energy by 2020.

According to Yang, the AIIB’s energy investments should be inclusive and show foresight. He argues that alongside coal investments, the bank needs to facilitate the transfer of renewable energy technology so that when Asian nations are ready to transition toward clean energy, they can expand the use of renewables.