China, major banks financing new coal power projects in Africa, Asia, says report
VIENNA -- New research published by Sustainable Energy for All (SEforALL) and Climate Policy Initiative (CPI) says pockets of funders continue to finance additional coal-fired generation capacity in South Asia and Sub-Saharan Africa. It says Chinese state-owned institutions and the world's largest banks continue to finance coal power in countries with greatest needs for electricity access, with US$42 billion committed to grid-connected coal power plants between 2013-2019 in 18 countries studied.
The Coal Power Finance in High-Impact Countries knowledge brief analyses 18 countries with the largest electricity access gaps (i.e. high-impact countries) to identify those receiving finance for coal-fired power, the sources of this investment, its key drivers and the risks attached.
"The idea of a coal phase-out does not hold true everywhere," said Olivia Coldrey, Head of Energy Finance and Clean Cooking at SEforALL.
"We continue to see significant investment in coal-fired power generation in countries with high rates of energy poverty. These countries need affordable, reliable and clean energy to support their socio-economic development and to mitigate climate change.
"Financing new coal projects is inconsistent with these objectives and holds back the energy transition."
From 2013 to 2019, US$42 billion was committed to grid-connected coal power plants in the 18 countries studied.
Among them, Bangladesh, India and Pakistan received the majority of finance commitments to new coal plants, while in Africa, Madagascar, Mozambique, Malawi, Niger and Tanzania all host active coal plant development.
International finance accounted for the majority of the US$42 billion, with Chinese financial institutions accounting for 40% of the total.
With South Korea and Japan recently announcing they will stop financing new coal plants overseas, China remains the last major source of international public coal finance not to have committed to ending finance for overseas coal plants, the report says.
"This stands in contrast with China's domestic energy policy, which is prioritising a transition to renewable energy, peak emissions before 2030 and a net-zero economy by 2060."
The report points out that China is not alone. Commercial financial institutions worldwide continue to support coal power plant development indirectly, despite having implemented policies to exclude direct financing of new coal-fired generation assets.
"From 2016 to 2020, the 38 banks that exclude direct finance for coal-fired power plants have nonetheless provided over USD 52 billion in finance to companies engaged in coal projects," it says.