April 24, 2020 Read More →

Japan Bank for International Cooperation takes first steps away from coal-plant financing

Eco-Business:

Japan Bank for International Cooperation (JBIC) will henceforth reject requests for loans for new coal projects, the bank’s head, Tadashi Maeda, was reported saying on Wednesday, making it the third Japanese financial institution to signal a shift away from the world’s dirtiest fossil fuel this month.

The government-run firm, which has lent billions to coal developers over the years, will no longer accept loan applications for new coal-fired power stations, said the governor in an interview with Japanese business magazine Diamond Online, explaining that assessments of coal investments took too long, which could lock countries into energy technology that could be outdated by the time a decision was reached.

For now, JBIC’s coal exit remains a mere statement, as it yet needs to be enshrined in a formal policy, said Julien Vincent, executive director of Australian non-governmental organisation Market Forces, which has been campaigning for Asian banks to ditch coal. It is still unclear when such a policy will be released.

One of the world’s top providers of subsidised government capital for coal power development, JBIC has handed out US$14 billion in loans for nearly 30 new coal power plants, helping add at least another 37.7 gigawatts of new polluting coal power capacity from Mexico to Indonesia, data by Market Forces shows.

But it is not alone. Major lenders in Japan, including Mizuho, Mitsubishi UFJ and Sumitomo Mitsui, have been the biggest coal financiers globally. In the five years since the Paris climate accord was signed, they have poured US$282 billion into fossil fuels, revealed a report released last month. However, this also puts Japan in a unique position to drive Asia’s shift away from dirty coal. Earlier this year, the nation’s environment ministry said it would review its export policy on coal-fired power stations in response to global criticism over the government’s backing of coal projects in countries like Indonesia and Vietnam.

“If Japan puts an end to exporting coal power and focuses exclusively on catalysing renewable technology, South Korea and China may be under tremendous pressure to change due to stresses on their balance sheets,” said Sara Ahmed, an energy finance analyst for the US-based Institute for Energy Economics and Financial Analysis.

[Tim Ha]

More: JBIC becomes third Japanese bank in a month to signal move away from coal

Comments are closed.