The G8 countries met in Gleneagles in July 2005 to discuss actions on Climate Change, Clean Energy and Sustainable Development. The Gleneagles' Plan of Action, by supporting measures to help improve the investment environment, aims to shift a growing share of investments in the energy sector towards cleaner or more efficient energy technologies.  In addition, ecosystems, societies and economies are becoming increasing vulnerable to environmental and climate risks.  This is particularly the case in Africa. Consequently, there is a need to develop an approach that will not only facilitate the transfer of finance and technology but will also improve the capacity of countries to adapt to climate change.

Within the G8 Action Plan, it was agreed that the World Bank and regional development banks (RDBs) would create a Clean Energy Investment Framework to address these issues. The purpose of this framework is to accelerate investment in clean energy and energy efficiency and to develop new approaches for adaptation.

It is expected that the World Bank and the RDBs (ADB, IaDB, AsDB, EBRD) will:

• Identify investment gaps and constraints to increasing activities and leveraging private sector investment
• Assess current instruments and identify constraints (lack of capacity - TA, grants, risk management, debt or equity provision, poor integration of instruments with separate IFIs);
• Identify the steps to improve effectiveness (financing gaps, the integration of climate change within relevant IFI sectoral activities, combination of services within and across IFIs, increased cooperation between IFIs and the private sector);
• Develop new instruments and mechanisms to reduce cost and risk of investment in clean energy;
• Identify the financial resources to fund these activities

• The outline of the Investment Framework by the IMF/World Bank Spring Meetings in April 2006 where the World Bank will report on progress. RDB participation in work to develop the framework is extremely important. They have been asked to gather and share with the World Bank an Investment Framework Action Plan (with a report of existing activities, constraints and views how to improve effectiveness). IFIs have met three times since the start of the process to discuss progress and a further meetings are planned.
• Each RDB is requested present to its own Board its strategy by fourth quarter 2006, building on the Investment Framework but also be tailored to suit the different characteristics of each RDB.
• The framework is expected to develop further over the next three years, with a final report during the Japanese G8 Presidency in 2008.

ADB involvement in the framework

The ADB is designing its own Plan of Action within the overall framework, that in line with its poverty reduction mandate will address the issues that are important for its regional member countries. This also provides an opportunity to tap into the resources and experience of other key partners whilst offering its own expertise and views. It will allow the Bank to bring together existing actions and to develop a strategic, coherent policy on energy and climate change. Therefore, the Investment Framework will complement, and provide a useful input to, the ongoing review of the ADB energy policy and subsequent development of the ADB Energy Efficiency and Renewable Energy Strategy.

A first presentation of teh Investment Framework to the ADB/ADF Board will be given shortly. We intend to inform you and other stakeholders in more detail on the Investment Framework and the ADB's contribution shortly thereafter.