January 6, 2021 Read More →

Units of South Korea’s Hanwha Group to stop financial support for coal projects

Power:

Affiliates of one of South Korea’s largest business conglomerates announced they no longer will provide financial support for coal projects, putting in jeopardy plans to finish a 2,100-MW coal-fired power plant project that has been expected to come online in 2024.

The six financial affiliates of the Hanwha Group, during a video conference on Jan. 5, pledged to divest any investments in future coal projects, both in South Korea and elsewhere. The six in a news release also said they “will not purchase any corporate bonds issued for the construction of domestic and foreign coal plants.”

Tuesday’s announcement comes after South Korean officials, including President Moon Jae-in, in October of last year pledged to spend about 8 trillion won ($7 billion) to make the country carbon-neutral by 2050. The Hanwha affiliates’ move follows other divestment commitments from large Korean finance companies over the past year, including Samsung, Shinhan, KB, and Woori Financial Group.

“As a leader in the global renewable energy field, we will work to act decisively on climate change, and incorporate more environmentally friendly practices to usher in a net-zero society,” said Kim Seung-yeon, president of Hanwha Group, in an email to POWER. The six Hanwha affiliates include Hanwha Life Insurance, Hanwha General Insurance, Hanwha Investment & Securities, Hanwha Asset Management, Hanwha Savings Bank, and Carrot General Insurance. Hanwha General Insurance also pledged to not take over insurance contracts for future coal power projects. Hanwha Investment & Securities announced it would not take part in additional refinancing for a midstream coal port facility in Australia.

Sejong Youn, director of climate finance at Seoul-based NGO Solutions for Our Climate, said after Tuesday’s announcement: “We welcome Hanwha joining other major financial groups in ending coal finance. Korea’s financial sector is quickly coming to terms with the significant financial risks of support to coal power projects which calls for a serious reconsideration of the remaining coal projects in the pipeline.”

Those remaining projects include the Samcheok Bluepower coal-fired plant, a target of the Korea Beyond Coal campaign, a network of civic and environmental groups advocating for a 2030 coal phaseout in South Korea. The plant is being built by industrial groups Posco Energy and Doosan Heavy Industries & Construction, who began construction in 2019. The Beyond Coal group has pressured the country’s top 30 asset management firms to end investments in coal; at least 10, including Hanwha, have said they would not invest in the Samcheok project, representing management of 69% of the bond assets for the plant. Officials said Tuesday the project still needs about $730 million, about 16% of the project’s cost, to complete construction.

[Darrell Proctor]

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