SINGAPORE (Reuters) -- The Asian Development Bank will no longer finance coal mining or oil and natural gas production and exploration, it announced in a draft policy statement on Friday, a move welcomed by environmental groups, which said it was a decade overdue.
The multilateral development bank, which focuses on eradicating poverty in Asia, provided no timeline for its commitment. It also laid out conditions under which fossil fuel projects would continue to receive funding, such as where no other cost-effective technology was available.
Yongping Zhai, head of the ADB's energy sector, said the draft would be deliberated by its board of directors in October.
Green groups had earlier this week urged the ADB to end loans to the entire fossil fuels sector.
"The draft coal ban policy is a decade late, but it still helps build the economic case for the energy transition to governments and investors, and will help avoid more stranded coal assets," said Pedro H. Maniego Jr., senior policy adviser at the Institute for Climate and Sustainable Cities.
"If the Bank will consider fossil gas as a bridge and transition fuel, it needs to stipulate an end," he added.
Set up in the early 1960s and headquartered in Manila, the ADB has channelled $42.5 billion into the energy sector across the region between 2009 and 2019, it said on its website.