Strategy 2030ENERGY SECTOR DIRECTIONAL GUIDE SUMMARYInclusive, Just, and Affordable Low-Carbon Transition in Asia and the PacificThis Energy Sector Directional Guide (ESDG) provides the strategic direction of the Asian Development Bank (ADB) for the energy sector. The ESDG assesses the current energy sector trends, challenges, and opportunities, and how ADB can best position itself to add value to energy sector development in the Asia and Pacific region. The guide also outlines the priorities and focus for the energy sector in line with ADB’s Strategy 2030. The guide aims to support ADB staff in conducting energy sector operations in line with the 2021 Energy Policy up to 2030. The five policy principles of the 2021 Energy Policy are also the foundations of this ESDG and comprise the ESDG’s vision and approach. The ESDG aligns with Strategy 2030 and its seven operational priorities. Where We AreEnergy cuts across all aspects of development and is essential to inclusive socioeconomic development and gender equality. As such, energy plays an important role in supporting development of other sectors such as agriculture, education, health, transport, urban, and water.On the other hand, energy production and consumption are responsible for almost three-quarters of global greenhouse gas emissions. This places the energy sector at the forefront of global eorts to address the impact of energy use on climate and environment.The energy landscape has changed radically over the last decade. The Sustainable Development Goals (established in ), the Paris Agreement on climate change (adopted in ), and ADB’s Strategy , published in , set ambitious targets for providing reliable energy access to all, and amplified the calls for action on climate change.The main challenges and emerging needs for ADB’s developing member countries (DMCs) in the energy sector still lie in ensuring (i) universal access to electricity, and clean cooking, heating, and cooling options for all households; (ii) energy security to support economic growth; (iii) sustainability across the dimensions of financial viability, eective operation and maintenance of infrastructure, resilience to climate change and extreme events, climate mitigation via lower-carbon use, health, and environmental impacts; and (iv) sector governance, including regulations, utilities’ performance, and private sector participation.ADB’s energy sector operations have played a substantial role in delivering energy access, contributing to economic development, and improving lives throughout the region. However, achieving universal energy access to a reliable, ecient, and aordable energy supply across the region, and supporting a low-carbon transition still requiret mobilizing substantial eorts and resources.A sector-wide evaluation in by ADB’s Independent Evaluation Department found that ADB’s Energy Policy had been aligned with the needs of the energy sectors in ADB’s DMCs and Strategy and was relevant to the ADB program during the review period. However, the Energy Policy was no longer aligned with the Sustainable Development Goals, the Paris Agreement, and ADB’s Strategy , thus needing an update.The new Energy Policy of ADB was approved in October . The vision of ADB’s Energy Policy is “supporting low-carbon transition in Asia and the Pacific.” The objectives of the sector operations are to help ADB’s DMCs accelerate the development of sustainable and resilient energy systems that provide reliable and aordable access for all, foster inclusive and environmentally sustainable economic growth and social development, and support the low-carbon transition in Asia and the Pacific.From left: Children in the Tondo neigborhood in Manila study by compact fluorescent light (CFL) bulb; lower electricity bills help small stall owners. Where We Want to BeFrom left: The Theppana Wind Farm provides electricity in a farmland in Thailand; Department of Energy technician in Manila tests CFL bulbs.To achieve the energy sector’s vision and objectives, ADB’s Energy Policy was developed based on the following five principles:i. Supporting eorts to bring aordable, reliable, sustainable, and modern energy to all, to eradicate extreme poverty and reduce social inequalities;ii. Supporting DMCs to tackle climate change, enhance environmental sustainability, and build climate and disaster resilience;iii. Supporting the institutional development, financial sustainability, and good governance of energy sector institutions, companies, and private sector participation, and assisting in creating the policy frameworks needed to manage the energy transition;iv. Promoting regional energy cooperation and the integration of energy systems to strengthen energy security and increase cross-border access to cleaner energy sources; and,v. Continuing to combine finance, knowledge, partnerships, and its country-focused approach to deliver integrated solution