September 25, 2018 Read More →

Coal in the Philippines: Are banks risking US$21 billion on stranded assets?

EcoBusiness.com:

Banks in the Philippines continue to finance coal-fired plants despite the looming risk that the plants will not be able to pay back loans for their construction.

Even though President Rodrigo Duterte signed the Paris Climate Accord last year, there has been a coal boom in the country, with 10,423 megawatts (MW) of largely imported coal in the pipeline, amounting to about US$21 billion.

This will add to a total of 7,419 MW of existing coal capacity, according to a study by United States-based think tank Institute for Energy Economics and Financial Analysis (IEEFA).

A separate study by Carbon Brief finds that the island nation has 12,141 megawatts (MW) of coal power in the pipeline, ranking it as 10th in the world for planned coal-fired capacity.

IEEFA energy analyst Sara Jane Ahmed said that a surplus of coal-fired power has led to more plants turning into “stranded assets”. This means that the project will not have enough cash flow to cover the debt, leading to bankruptcy for the investor.

Coal in the Philippines: Are banks risking US$21 billion on stranded assets?

Posted in: IEEFA In the News

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