October 12, 2021 Read More →

India’s Federal Bank Limited to drop financing of new coal projects

Mercom India:

Federal Bank Limited will discontinue financing of any new-coal related projects, including coal-fired power projects. The announcement comes on the heels of the equity infusion from the International Finance Corporation (IFC) in July 2021.

In July 2021, IFC, the financial arm of the World Bank, acquired a 4.99% stake in Federal Bank for  $126 million. The bank signed up to the IFC’s new Green Equity Approach that supports clients to reduce coal exposure to zero, or near zero, by 2030.

Federal bank’s Environmental and Social Management System will add to its exclusion list new thermal coal mines or significant expansion of existing mines, new coal-fired power projects, or growth of existing projects.

With this, Federal Bank is expected to enhance its environmental, social, and governance (ESG) portfolio by increasing green portfolio financing for projects, including renewable energy, energy efficiency, climate-smart agriculture, green buildings, and waste management.

According to a report by the Centre for Financial Accountability India and Recourse, IFC has provided over $200 million to Federal Bank in loans and equity since 2006. Federal Bank has provided extensive exposure to coal mines and power projects during that period.

A growing number of financial institutions are moving away from financing coal-related projects.

[Harsh Shukla]

More: Federal Bank to Discontinue Financing New Coal Projects

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