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Asian Banks Pour £600bn Into 1600 New Coal Power Plants

December 11, 2017

By Paul Homewood

 

 

Research by campaign groups including the Rainforest Action Network, BankTrack and Friends of the Earth has discovered that banks have financed new coal plant developments to the tune of $600bn in the last three years.

 

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"Coal is dead" was the verdict in June this year from a senior executive at BlackRock, the world’s largest investment group. The coal industry may indeed be in decline, due to a combination of factors including the plummeting cost of renewable energy, tighter regulatory regimes and grassroots opposition to coal plants worldwide, but it is still far from down and out.

According to data this year from the Global Coal Plant Tracker, while the number of new coal plants in the pre-construction phase around the world almost halved between 2015 and 2016, there are currently over 1,600 new coal plant units still in planning, predominantly in developing countries. If these were to be built, the world’s coal-fired power capacity would be expanded by more than 42%. To put this threat in context, the United Nations Environment Program has recently recommended an end to the construction of new coal power plants and an accelerated phasing out of existing plants as key steps towards achieving the goals of the Paris Agreement.

This threat has been captured by the ‘Global Coal Exit List‘, published in full by urgewald during the 2017 UN Climate Summit in Bonn. It provides for the first time the list of the top 120 coal plant developers, a group of companies that together plan to build more than 550,000 MW of new, climate-busting, coal-fired power capacity, the equivalent of 2.5 times India’s entire coal plant fleet. These are the companies which should be at the top of every divestment list – further investments in these companies are an entry ticket to a 4°C world and must be stopped now.

BankTrack, urgewald, Friends of the Earth France, Re:Common and Rainforest Action Network have dug into the investment numbers to discover which commercial banks are financing these companies. Our research shows that between January 2014 and September 2017, the global banking sector provided and mobilised financing in excess of $600 billion for the top 120 coal plant developers, via lending and underwriting. And approaching half of this sum – $275 billion – has been provided since the Paris Agreement was signed in 2015, despite their coal plant development plans being fundamentally incompatible with the objectives of this agreement.

Major financing for coal power expansion is still materialising despite some notable progress in recent years from a number of big banks which have, in various ways, publicly committed to curb their financing for companies in the coal power sector. Yet, as revealed by this new dataset, banks are still a long way off from closing their doors to the 120 coal plant developers that pose the biggest threat to the climate.

On the occasion of the second anniversary of the Paris Agreement, world leaders are convening alongside major financial institutions and business leaders for Climate Finance Day. With a ‘global stocktake’ under way now on the climate action taken since the signing of the Paris Agreement, there is an urgent need to take stock of the coal power disaster that banks are facilitating – a disaster which, for the most part, is continuing unabated. This analysis is published in tandem with the ‘Investors vs. the Paris Agreement‘ report from urgewald which reveals the institutions still investing in the top 120 coal plant developers.

The coal plant developer companies and their financial supporters are hereby unveiled – who would now argue against the financial blacklisting of these coal companies which are threatening us all?

https://www.banktrack.org/coaldevelopers/

 

So who are these wicked bankers?

Well, it turns out they are mostly Chinese banks, along with the Japanese Mizuho and the State Bank of India.

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 https://www.banktrack.org/coaldevelopers/

 

As reported here before, Asian banks have only been too happy to fill the vacuum left by virtue signalling western banks.

Developing countries get cheap, reliable power, and the banks get a decent return.

Above all though, it is another opportunity for China to build up its global power and influence. Remember that banks like the ICBC are state-owned, and major policy decisions like these will have been made with the full approval of the Chinese government.

10 Comments
  1. Tim permalink
    December 11, 2017 6:32 pm

    “The plummeting cost of renewable energy” ??? Says who?

    • Graeme No.3 permalink
      December 11, 2017 7:51 pm

      Tim:
      every brainwashed greenie (there aren’t any other types) all believe this. I have a copy of Scientific American in which it is said that the cost of solar PV is dropping so fast that within 6 years no-one would think of building a new coal fired station, and 2 years after that the first large PV solar power station will be ready.
      That is the October 1987 issue.

  2. Ian Magness permalink
    December 11, 2017 6:46 pm

    Yep, this is the financial services version of “exporting jobs” away from the western world to the developing world where the companies and financial institutions are only too delighted to take the business. In reality, these traditional western banks, insurance companies and fund managers are not virtue signalling for positive reasons, they are simply giving in to pressure from the likes of Greenpeace not to support the coal industry. They are running scared of the negative publicity that their involvement might create once publicised by green activist groups. When, eventually, all this AGW nonsense is exposed as just that, and the coal (and no doubt other mining industries) thrive having taken their business elsewhere, how stupid will these gutless directors look?

  3. Robert Fairless permalink
    December 11, 2017 6:59 pm

    Who decides which two million people are going to remain in the Stone Age? Deprived of energy means deprived of even basic civilisation. They will live and die in poverty living miserable shortened lives. It will not be the people who attended the Paris Conference last year.

  4. December 11, 2017 7:22 pm

    ‘climate-busting’ – these folk need to grow up. Hilarious.

  5. mikewaite permalink
    December 11, 2017 7:57 pm

    Hold on -there is something not right here.
    The Chinese banks , with Chinese Govt blessing and sovereign funds are underwriting or providing loans for the construction and probably the technical management of coal power stations in some of the poorer and less developed nations .
    I cannot imagine that the Chinese , commonly agreed to be of all people the most astute financially, will not expect a yearly return on this investment .
    Where will the money come from?
    These are poor nations .
    Will it come from the increase in trade and exploitation of natural resources ?
    Well maybe in the long term but in the short term ?
    Is this where our insanely deluded Govt hands over billions to repay the Chinese for building the very coal power stations that it has forbidden its own people to operate .

  6. Tom Dowter permalink
    December 11, 2017 8:56 pm

    So, there are lots of institutions with lots of money who would benefit if AGW were shown to be a load of rubbish thereby exonerating CO2. Why haven’t we heard from them?

  7. Gerry, England permalink
    December 12, 2017 1:26 pm

    Investing in China looks like a good idea. And with Chinese, Indian and Japanese banks providing the finance I wonder where the turbine equipment will be made? Not by GE and Siemens it would seem. The price of not funding developments.

  8. Ian permalink
    December 12, 2017 11:44 pm

    On Tuesday’s Daily Politics, Claire Perry, UK Govt. Climate spokesperson, was chuffed to be able to report from Paris that the UK will be free of coal power by 2025. She also claimed that the latest wind and solar energy contract prices are subsidy-free and competitive with fossil fuel power. I think I’ve read on this site that this ain’t so.

    I can also report that I have now asked three times for her calculations to back up her claim that UK domestic power customers are £290/year better off, offsetting the acknowledged cost of climate policies of £140-£180. I feel an official complaint coming on.

  9. December 13, 2017 9:16 am

    The World Bank is too busy pretending to ‘save the planet’.

    The World Bank Group will no longer finance upstream oil and gas, after 2019.
    http://www.worldbank.org/en/news/press-release/2017/12/12/world-bank-group-announcements-at-one-planet-summit

    They already backed out of coal finance.

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