Civil society challenges AIIB to raise the bar on climate, infrastructure, and accountability

Doha, Qatar – Civil society organizations are urging AIIB to establish a fossil-fuel exit pathway, reassess large-scale hydropower risks, and strengthen accountability to project-affected communities.

At the 2026 Asian Infrastructure Investment Bank (AIIB) Annual Meeting, NGO Forum on ADB urged the Bank to use its transition into a second decade to set a clearer direction for financing that puts climate resilience, community rights and accountability at its core.

As AIIB looks to shape the next generation of infrastructure, the Forum network called on the Bank to ensure that “impact and innovation” translate into three concrete commitments: moving decisively away from fossil fuels, addressing the risks of large-scale infrastructure such as hydropower, and ensuring that affected communities have a meaningful voice and access to remedy.

“10 years down the road, AIIB is still behind in listening to the voices of communities on the ground. AIIB must accept that communities on the ground are the primary stakeholders in its climate and infrastructure financing,” said Hemantha Withanage, International Convenor of the NGO Forum on ADB. “Community rights must be upheld, and accountability is fundamental to the sustainability of AIIB projects.”

A key opportunity for AIIB to turn its climate commitments into concrete policy will come with the review of its Energy Sector Strategy (ESS) in 2027. The review will be an important test of whether the Bank is prepared to strengthen its approach to fossil fuels and align its energy financing more firmly with a low-carbon transition.

While CSOs acknowledged that AIIB has increased its renewable-energy financing since the adoption of its 2022 ESS, Forum noted that the current one continues to recognize a potential transitional role for fossil gas and permits financing for certain gas-related infrastructure projects.

Forum is calling for the 2027 review to establish a transparent and time-bound pathway for ending fossil-fuel exposure, including an end to new fossil-gas and liquefied natural gas approvals.

“The 2027 energy review tests whether AIIB’s ‘Sustainable Energy for Tomorrow’ slogan means structural reform away from fossil fuels and false solutions, or just a smokescreen for more gas, heavy hydro, and unproven abatement technologies. With peer MDBs also backsliding on climate commitments, we don’t need more Banks going through the same path.  If AIIB is serious on its rhetoric, it should start with a genuine, adequately resourced consultation process, enabling deep and meaningful engagement for communities, CSOs, human rights, and environmental defenders, reversing the opaque 2022 ESS update,” according to Nazareth Del Pilar, Just Transitions Advocacy Officer of the NGO Forum.

Forum Network is also urging AIIB to reassess its approach to large-scale hydropower, particularly in environmentally and geologically fragile areas, pointing to Nepal’s Trishuli river corridor, where major hydropower facilities have been affected by recent disasters, including the AIIB-backed 216-megawatt Upper Trishuli-1 Hydropower Project, of up to USD90 million in financing.

As AIIB considers up to USD200-million in financing for the proposed Dudhkoshi Storage Hydroelectric Project, Forum is calling for a halt to new large-scale hydropower financing pending a broader review of climate, geological, biodiversity, and community risks.

“Indigenous Peoples have lived with and protected the Trishuli and Dudhkoshi river systems for generations, yet they are too often treated as an afterthought in hydropower decisions. AIIB must guarantee free, prior and informed consent before any financing is approved, and make sure Indigenous communities have real access to remedy when their lands, livelihoods and cultural heritage are harmed,” said Adv. Indira Shreesh, Founder/Chair of INWOLAG.

According to Hussain Jarwar, Chief Executive Officer of Indus Consortium, “AIIB should take emerging climate-related challenges into account and provide targeted support to address impacts on local communities”.

In Pakistan, the blended financing of the BH Hydropower Project by AIIB and the Asian Development Bank (ADB) has raised concerns over the implementation of safeguards, inadequate land compensation, and damage to homes caused by tunnel blasting. Jarwar also added, “These impacts have further exacerbated the hardships faced by affected communities. AIIB should ensure these harms are addressed, affected communities receive fair compensation, and that effective remedial measures are put in place to prevent further adverse impacts.”

Forum members are also continuing to scrutinize AIIB-backed projects and technologies projected as climate or transition investments, including waste-to-energy (WTE).

Mayang Azurin, Deputy Director for Campaigns, Global Alliance for Incinerator Alternatives (GAIA) – Asia Pacific, explained, “AIIB should reassess whether it is still committed to its Energy Sector framework to prioritize waste reduction, reuse, and recycling before incineration. WTE is recognized in the Gulf Waste-to-Energy project in Thailand, and the Metro Manila Flooding project with incineration in the Philippines shows why AIIB must not rely on technical emissions controls or financial viability—it must examine whether WTE undermines real GHG reductions, shifts pollution onto communities, isolates them from decision-making, and creates long-term lock-in.”

She also added that “This reassessment must be undertaken before a project is approved and policy development processes are finalized, not after communities have already borne its risks.”

Beyond financing decisions, Forum also stressed that AIIB’s accountability mechanism must be accessible and meaningful for communities affected by its projects. While welcoming improvements under the revised Project-affected People’s Mechanism (PPM), Forum said its credibility will ultimately depend on whether affected communities are aware of the mechanism and able to use it in practice.

AIIB’s public information showed no registered PPM submissions as of June 2026. While this does not in itself prove an absence of remedy, the Forum said the figure raises important questions about communities’ awareness of the mechanism and their ability to access it.

As AIIB enters its second decade, accountability must therefore extend beyond providing a channel for complaints after harm has occurred. Communities must be able to access information, raise concerns, and seek action early enough to help prevent harm.

“An accountability mechanism only matters if communities can actually reach it before irreversible harm occurs. AIIB must ensure that people know about the PPM before project approval, have access to project information in languages and formats they understand, and can raise concerns without intimidation or procedural barriers,” said Rayyan Hassan, NGO Forum’s Executive Director.

“In AIIB’s second decade, accountability must become an early-warning and prevention mechanism — not simply a remedy sought after communities have already paid the price,” he added.

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About the NGO Forum on ADB:

NGO Forum on ADB is a network of civil society organizations monitoring the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB). The Forum works to ensure that development projects respect human rights, environmental justice, and the voices of affected communities. It advocates for transparency, accountability, and genuine public participation in all stages of development finance.

(Photo from AIIB Website)

Dennis T. Paule, Media Liaison and Knowledge Management Officer, www.forum-adb.org

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