New Zealand commits $25M for ADB energy transition mechanism

New Zealand Prime Minister Christopher Luxon (Photo by Lillian SUWANRUMPHA / AFP)

The government of New Zealand has committed $25 million to the Energy Transition Mechanism Partnership Trust Fund (ETMPTF) of the Asian Development Bank (ADB), supporting the shift toward clean, sustainable energy in Southeast Asia.

New Zealand Prime Minister Christopher Luxon highlighted the commitment during meetings at ADB headquarters in Manila on Friday.

“We are grateful for this support from the government of New Zealand for the ETMPTF, which is an important driver of the Energy Transition Mechanism (ETM) program,” said ADB president Masatsugu Asakawa.

“As the climate bank for Asia and the Pacific, we believe ETM has the potential to be one of the largest carbon reduction programs in the world and a vital tool in the battle against climate change. Support from partners such as New Zealand is critical as we expand ETM across our region.”

The ETMPTF pools concessional funds from financing partners to finance critical groundwork such as feasibility studies for projects that align with ETM’s objectives, including the early retirement or repurposing of coal and other fossil fuel plants and clean energy ventures.

New Zealand’s grant is the third contribution to the ETMPTF, following support from Japan and Germany.

“New Zealand’s contribution to the ETM supports Southeast Asia’s ambition for an accelerated transition from fossil fuels to clean energy, while ensuring this transformation is fair and equitable,” Luxon said.

ETM is a regional, transformative program that seeks to use concessional and market-based funds to retire or repurpose existing coal and other fossil fuel power plants on an accelerated schedule and replace them with clean power.

ETM is one of several initiatives that aim to help Asia and the Pacific mitigate the worst impacts of climate change, such as extreme sea level rise and destructive weather events.

ADB affirmed its commitment to achieving a “prosperous, inclusive, resilient and sustainable” Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members, of which 49 are from the region.