Environmental groups are seeking an injunction against a move by South Korea to bail out a builder of coal-fired power plants, saying the rescue package goes against the country’s climate and public health commitments.
Korea Development Bank (KDB) and the Export-Import Bank of Korea (KEXIM) on March 26 issued a 1 trillion won ($825 million) emergency loan to Doosan Heavy Industries & Construction Co. The bailout is listed as part of the South Korean government’s stimulus package for businesses impacted by the COVID-19 pandemic.
But the decision has come under fire from environmental watchdogs, given that most of Doosan’s revenue comes from building coal-fired power plants.
“These decisions to support Doosan Heavy come with significant environmental and health consequences,” the environmental groups from South Korea, Indonesia and other countries wrote in a joint letter submitted April 8 to the South Korean Ministry of Economy and Finance.
They said Doosan’s financial woes were not directly caused by the COVID-19 pandemic. They noted that, between 2010 and 2019, Doosan’s credit rating dropped from A+ to BBB and its share price declined by 93% — “well before COVID-19 was an apparent crisis,” they wrote.
Eighty percent of Doosan’s revenue comes from coal power plants at home and abroad, including two projects on Indonesia’s Java Island, the groups said. South Korean-financed overseas coal power projects employ the country’s advanced technology, but are still several times more polluting than those in South Korea, as they take advantage of laxer environmental regulations in South and Southeast Asian countries to trim construction and operating costs, the groups said.