Greening Asia’s Infrastructure Development

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Herath GunatilakeDirector

Regional and Sustainable Development Department

Asian Development Bank

Asia’s Infrastructure Investment Requirements and Deficits

• Between 2009 and 2013, Asia Pacific region accounted for more than 50% of the global increase in capital spending on infrastructure

• The Asia Pacific infrastructure investment need is expected to grow by 7% to 8% a year over the next decade.

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Asia’s Infrastructure Investment Requirements and Deficits

• Asia’s overall infrastructure investment needs are estimated at $4.4 trillion for 2015 - 2020– average infrastructure investment need

of about $730 billion per year – 68% of which is for new capacity and

32% of which is for maintaining and replacing existing infrastructure

– ADB about $20 billion, may increase to about $30 billion

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Asia’s Infrastructure Investment Requirements and Deficits

• In addition to the overall national infrastructure needs, $175 billion investment is needed for regional projects—with an average infrastructure investment need of close to $30 billion per year

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Estimate Infrastructure Needs in Developing Asia (in US billion)

- 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

Electricity Telecommunication Transport Water andSanitation

New Capacity Replacement

5Source: ADB and ADBI

ADB’s Environment Operations Directions

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Environmentally sustainable growth as one of 3 development agendas, and environment as a core area

of operations

Climate change (mitigation and adaptation)

An additional 3 billion Asians achieve European living standards by 2050

Asia’s Share of Global GDP, 1700-2050

Asia’s Energy Trilemma

• Accessibility: 600 million people without access to electricity (and intermittent services for those who have access)

• Affordability: costs of supply are high (or unsustainable subsidies)

• Sustainability: air pollution and CO2 emissions

A. Clean Energy

Developing Asia’s Share in Global CO2 Emissions from Energy Consumption

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Rest ofthe World53%

Rest of the World

63%

Developing Asia

37%37% 47%47%

20102010 20352035

Source: ADB, APERC 2013

In 1973: 9%

Future

ADB Energy Sector VisionAffordable Clean Energy for All

Current

Energy Efficiency

RE

Fossil fuels

EE&RE

Fossil fuels

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Investment Requirements: BAU vs Alternative (2010-2035)

Source: ADB, APERC 2013

Problem of rapid motorization

B. Sustainable Transportation

Congestion

2-5% of GDP

Air pollution

2-4% of GDP

Rising GHG emissions

• Transport is 23% of global energy-related GHG emissions

• Land transport is ¾ of transport GHG emissions

• Land transport GHG emissions to

double by 2050 based on current trend

Unsafe roads

• 645,000 annual road deaths and 30 million injuries in developing Asia

• Leading cause of death for 15-44 year olds, 2nd leading cause for 6-14 year olds

• Vulnerable users are 50–75% of deaths

• Costs 2-5% of GDP

Avoid-Shift-Improve Paradigm

Lower congestion, emissions, air pollution,

road accidents, respiratory & health

problems17

STI lending directions

Mainstream sustainability in roads

Scale up 4 areas

Affordable

Accessible

Environment friendly

Safe

Sustainable transport systems

0%

20%

40%

60%

80%

100%

Road Rail Water UrbanTransp

Air

2000-092020

STI subsector lending targets

• Urban transport• Addressing climate change• Cross-border transport & logistics• Road safety & social sustainability

STI priorities and targets

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Asia’s Cities

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C. Sustainable Urban Development

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ADB’s approach

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Addressing Equity Issues

(Inclusiveness)Providing appropriate

livelihood, service, shelter, and

infrastructure solutions to poor and

vulnerable communities

Promoting Improved Environment and

Resilience (Green)

Developing resource use-efficient and climate change-resilient cities

Building the Economy

(Competitiveness)

Providing strategic physical, social and

institutional infrastructure for inclusive growth

ADB’s Five Core Urban Areas

• City Cluster Economic Development (CCED)

• Urban transport• Waste management• Municipal finance• Urban renewal and slum rehabilitation

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Lessons/Challenges

• Infrastructure -opportunity for environment management

• Greening is costly, reliable estimates of benefits may help

• Technology transfer is challenging• Making infrastructure resilient to natural

disasters• Public resource are inadequate, private

investment PPPs are vital

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Thank you!

For more information:

http:www.adb.org

hgunatilake@adb.org

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