Asian Development Bank (ADB) will conduct a study on its Energy Policy, to promote wider use of clean energy in Asia and Pacific and boost the region's energy security.
Backed by a US$1.0 million technical assistance grant, the study will address a broad range of growing challenges in the energy sector, said an ADB press release.
These include environmental risks and incentives - such as the clean development mechanism - promoting private sector participation, and expanding the role of renewable energy, energy efficiency, and demand side management.
With Asia's energy consumption taking a heavy toll on the environment as well as on the financial positions of some of the region's developing economies, ADB is planning to develop a new strategy to guide energy sector operations for the next five years.
According to the International Energy Agency, Asia's current annual energy consumption of over 2,100 billion tons of oil equivalent, is expected to more than double by 2025. In the same period, annual electricity demand is expected to grow to 6.3 trillion kilowatthour (kWh) from 2.6 trillion (kWh).
Greenhouse gas emissions in the region are expected to rise from 6 billion tons to 12 billion tons of carbon dioxide equivalent by 2020, accounting for 32 per cent of global emissions.
The adoption of cleaner technologies - such as energy efficiency, renewable energy, and clean coal technologies - is still slow within the region. With oil prices rising to new heights, some developing member economies are forced to borrow money to finance their oil and gas imports.
"Policy makers in Asia have begun to realise that a business-as-usual scenario is clearly not sustainable," says Ajay Guha, Principal Energy Sector Specialist.
"Developing countries require a stable and assured supply of energy, However, the technologies that will help achieve this, such as improved energy efficiency, renewable energy, and clean coal, are limited and far below potential," he added.
A team of energy specialists will develop and recommend strategies that ADB will adopt in its lending operations from 2007 to 2012 to enhance the effectiveness of its energy sector assistance.
The team will build on the recently-launched ADB Energy Efficiency Initiative which plans an annual allocation of $1 billion to finance clean energy projects within the next two to three years.
The draft strategy will undergo external review and consultations, with workshops to be conducted in selected key developing countries.
Under the grant project, ADB will also produce a book that will provide developing countries with comprehensive energy data and available options. It will be jointly prepared with a group of reputable energy research institutions, including the International Energy Agency.
ADB has been involved in the energy sector since the early 1980s. The first energy policy was approved in 1981, just after the second oil crisis of 1979.
During 2001 to 2005, ADB's overall assistance to the energy sector amounted to $3.2 billion, a decline compared to $4.1 billion during 1996-2000.