May 17, 2018 Read More →

Barclays Takes Harder Line On Coal Project Financing

Clean Technica:

Barclays, one of the four “Big Banks” in the U.K., silently made big news last month, shifting its policies regarding financing coal mining and coal-fired power plants, as well as declaring “no appetite” for projects in World Heritage Sites or Ramsar Wetlands locations.

The bank declared in the first of two policy statements it had “no appetite” for project financing that supports development or expansion of projects in World Heritage Sites and Ramsar Wetlands locations unless in both cases there is prior consensus that such development will not adversely affect the site.

In addition to its commitment to protecting the Ramsar Wetlands, Barclays also published a lengthier, more in-depth policy statement regarding how it will do business with corporate banking and investment banking clients involved in the coal mining and coal-fired power sector. All such clients and their specific individual transactions will be reviewed on a case-by-case basis against a wide array of considerations ranging from adherence to the Equator Principles, use of efficient technology, and a client’s potential for stranded asset risk.

Unlike Barclays’ policies regarding World Heritage Sites and Ramsar Wetlands, its coal policy is much more nuanced and detailed, describing specific policies for specific aspects of the coal industry. For example, Barclays declared simply that it “has no appetite for project finance transactions for the development of greenfield thermal coal mines anywhere in the world” but had a much more detailed policy for mountaintop removal coal mining (MTR) given its legal recognition in the United States but the bank’s acknowledgement that this mining method “is also one that has been subject to intense political, judicial, and regulatory debate over the last decade.” As such, Barclays will “not directly finance MTR projects or developments” and will “apply enhanced due diligence to all credit and capital markets facilities involving clients which practice MTR.” Further, financing for companies which are significant producers of MTR-sourced coal will be provided “by exception only.”

Barclays also declared “no appetite” for project financing supporting the construction or material expansion of coal-fired power stations in high-income OECD countries (though such power plants utilizing carbon capture storage or sequestration technology will be considered on a case-by-case basis) or the construction or material expansion of coal-fired power stations in non-high-income OECD countries unless they use super-critical or ultra-critical technology — and such transactions will be subject to enhanced due diligence on a case-by-case basis.

More: Barclays Declares “No Appetite” For Thermal Coal Mining, Oil, & Gas, Moves To Protect World Heritage Sites

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