Interview mit Scott Morris
“Renewables are an economic choice”Scott Morris, Vice-President of the Asian Development Bank, talks to Friederike Bauer about the energy needs of developing nations, the sustainability agenda and why pragmatic solutions are the best way ahead.
The climate finance agenda remains a core part of our strategy for 2030. That has just been reaffirmed in the past year.
We have a climate agenda not because of discussions that happen far away in big conference halls but because our developing member countries demand it. They are looking to us to help them address their resilient needs because for them this is not a future and far-off problem. It is something Asian countries are dealing with in real time. We have just had another typhoon that affected the Philippines. The airport of Hong Kong, a huge international airport, had to take the extraordinary step of shutting down for 36 hours. These weather events and the toll they are taking are a reality in this part of the world. As a result, the discussions with our governments are very much focused on the kinds of investments they need to make to ensure security for people and infrastructure.
Very much so. Our member countries have an enormous and growing energy need. More advanced countries think about their energy transition, meaning they try to work on their energy mix. It's a slightly different dynamic when you talk with an Indonesian, a Filipino, or a small Pacific Island country: they are trying to build their energy supply in a way that is economic and sustainable. So, this is a different context, involving less worries about the mix and more about the supply.
We see a strong demand for investments in renewable energy across all our countries. They focus on what is reliable and affordable over time. And that very often is a renewable solution. Take the example of Nauru, a tiny island in the Pacific. The government there pursues solar projects not because it expects emissions reduction benefits. But because it represents the best energy choice. Nauru right now invests in solar, with support from the ADB. When this project is implemented, it will account for nearly half of the country's energy supply. So, it's economically the best variant because it reduces Nauru's reliance on costly diesel imports and its exposure to exchange rates.
That's right. Renewables are an economic choice.
Fossil fuels are still dominant in this region. But countries are also investing in renewable energy at a pace that is unmatched globally. They are not interested in ideological debates, renewables are taken as a given and chosen when, as I said, economically viable, affordable and reliable. The harder issue here is rather around the state of the power grids, how they could be developed further and about the policy environment for making the necessary investments here.
We don't spend a lot of time trying to answer that question at ADB. We spend a lot more time on the building blocks toward that kind of outcome. Whether that is realistic or not doesn't motivate us. We focus on what gets our countries down the road to the commitments they made and the goals they have.
There is no question about the scale of our investment in the green space. The commitments we have made around climate finance are very clear and ambitious. Last year the ADB decided that by 2030 climate finance should reach 50 percent of the total annual committed financing. That would come down to over 100 billion dollars in cumulative climate finance from our own resources between 2019 and 2030. Also, until then we aim to ensure that 75 percent of our operations will support climate change mitigation and/or adaptation. These numbers speak for themselves and underscore the direction ADB is heading for.
One of our biggest projects right now is here in the Philippines where we provide the government with a 1.4-billion-dollar loan for the so-called Malolos-Clark Railway Project. It is a roughly 53-kilometer segment of a railway system that meets commuting needs and leads to Clark International Airport. When finished it will be a mass transportation system that is sustainable and will spur more investments, create jobs and contribute to economic growth. This is the kind of infrastructure that we are looking for because it helps our member states in their development aspirations and is at the same time climate-sound.
They are key because we all know that development needs private sector engagement. Plus, private firms are very important implementing partners for us. Therefore, we try to make sure firms globally understand that they have opportunities to work with us.
Definitely. We actively reach out to the private sector, also in Germany. Firms have a lot to offer, such as the leading edge of innovation, new technologies, and best practices. This can improve the quality of our projects and introduce our developing members to approaches that would not be available to them otherwise. Therefore, we are very interested in cooperating with firms, including from Germany. Our obligation is to explain our working mode better than we might have in the past. That includes our rules and regulations so that firms can bid on a project that we are financing. An institution like ours can be an entry point for them to the region.
Our partnership model is very broadly defined. We always keep talking to our clients. That's our primary relationship. This is where we are getting the work done. But beyond that we cooperate with European countries, the United States, and countries within Asia and the Pacific that are not developing members, such as Japan, Australia, Korea, and Singapore. They are important to us, because it means more financing and more expertise and capacity. That also includes institutions like KfW.
It is a challenging environment globally – there is no disputing that. We have so far been on a growth trajectory, and we are not in any way at odds with any of our shareholders. That includes as the largest ones Japan, the United States, China and India. None of them is pushing us off the track that we are on. There are always differences of view about the details of our agenda but for the fundamentals the support is there.
We feel fortunate and validated about the way we do things.
I spent most of my professional life working with multilateral development banks. I got to know all of them quite well over the years, and ADB stands out. I have always held in high regard the quality of its work, its lean and nimbleness. The bank is a relatively small institution that gets a lot done. Plus, it is located in an extremely dynamic world region. All of that appealed to me. That's why I joined ADB.
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