So. Africa: Major banks pulling out of funding coal-fired plants due to environmental & social concerns
‘Standard Bank joins banks not financing ‘dirty’ coal-fired power plants’
Standard Bank became the latest finance corporation this week to stop financing coal-fired power plants in the future, unless they met strict parameters set by the bank, following in the steps of others. Energy expert Chris Yelland said it appeared as if all the major banks were pulling out of funding coal-fired plants. “Nedbank, First Rand, and now Standard Bank – which has been on the cards for some time – have all pulled out. “Standard has explicitly stated it will not be funding Thabametsi or Khanyisa. It is a significant move by all the banks as they are under pressure not to finance independent coal power producers,” said Yelland. Banks were still funding Eskom, as evidenced by the recent R20 billion loan to alleviate Eskom’s liquidity issues, just not for specific coal projects.
According to the Centre for Environmental Rights (CER), Thabametsi was “largely owned by Japan’s Marubeni and South Korea’s Kepco” and was supposed to be based near Lephalale, Limpopo, while Khanyisa, supposed to be built near Emalahleni, Mpumalanga, was allegedly owned by Saudi-owned Acwa Power. Both are facing myriad legal challenges from the Life After Coal Campaign (comprising Earthlife Africa, the Centre for Environmental Rights, and Groundwork), over allegedly improper paperwork around environmental matters – and now, financing. CER attorney Michelle Koyama said although the organisation welcomed the move by financial institutions to address climate change, the idea of “clean coal” had to be disputed. “The banks’ support for higher efficiency, lower-emission coal-fired power plants, as a means to combat climate change, is disconcerting,” Koyama said.
Standard Bank’s chief executive of corporate and investment banking, Kenny Fihla, said the bank “supports the adoption of higher-efficiency, lower-emission coal-fired power plants, and carbon capture and storage technologies to reduce the environmental and social impact of coal-fired power generation. “We are mindful of the credit, investor and reputational risks associated with the financing of coal-fired power stations.” Yelland said there were alternatives for IDP’s to find finding, which would come at a higher cost and with more strings attached. According to the draft Integrated Resource Plan (IRP) 2019, the South African power system consists of the generation options, which are 38GW installed capacity from coal, 1.8GW from nuclear, 2.7GW from pumped storage, 1.7GW from hydro, 3.8GW from diesel and 3.7GW from renewable energy.