“The Asia and Pacific region has the right combination of elements - demand for energy, access to sunlight and arid land, technological maturity, and a sound investment climate,” says Haruhiko Kuroda of the Asian Development Bank (ADB). But high up-front capital costs of investing in solar and a perception that solar energy is a high risk are obstacles that have kept many solar energy investors on the sidelines until now.

“There is a risk of ‘solar divide’ where developing countries cannot receive the benefit of environmental technology despite its large potential,” he says. “The role of multilateral development institutions, such as ADB and its partners, should be to play a catalytic role to overcome these institutional capacity, policy, technology, and financing barriers.”

The region has strong and growing demand for energy, but “we have to provide these energy inputs in a sustainable way, by using renewable energy sources and employing new environmentally sound technologies,” Kuroda explains. ADB released an energy policy last year, which calls for increased access to energy, ensuring energy security, and promoting sustainable use of energy.

ADB to support 3,000 MW of solar by 2013

That policy sets a target for ADB to expand its clean energy operations from the current US$1 billion per year to US$2 bn per annum by 2013. The funding will catalyze projects for a total of 3,000 MW of solar power by 2013.

“Among renewable energy sources, solar energy has been one of the fastest–growing electricity technologies in recent years,” he says. “Solar energy has great significance” for countries in Asia and the Pacific because economies of scale can reduce costs to make solar energy competitive with the grid.

“If the world is to reduce its dependence on fossil fuels, Asia - especially developing Asia - needs to lead the way,” he concludes. “Developed countries should contribute by providing grant or low–cost financing and cutting–edge technologies” and a transition in developing Asia “will spread to other developing parts of the globe, toward unleashing a global revolution in the energy sector.”

Kuroda was speaking at the First Asia Solar Energy Forum in Manila, a two-day forum that was part of the Asian Solar Energy Initiative (ASEI) announced by ADB earlier this year. The session was supported by the United Nations Industrial Development Organization (UNIDO), the International Energy Agency (IEA), the Renewable Energy & Energy Efficiency Partnership (REEEP) and ADB.