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Japan to end coal financing

in Bangladesh, Indonesia

JAPAN JAPAN is ending the financing of coal power Japan’s foreign ministry press secretary said
plants in Bangladesh and Indonesia as part of at a news conference: “We decided that we
Tokyo’s commitment to agreements with its G7 cannot proceed any further with these cases as
partners to help reduce its own carbon footprint, subjects to yen loans,” adding, “regarding this
and stop funding coal projects. Indramayu coal-fired power generation plan,
The announcement by governments in the Indonesian government itself has a policy
Dhaka and Tokyo will initially affect the pro- of not implementing it anymore (and) the Jap-
posed Matarbari-2 coal power plant. Had it been anese government has decided not to consider
financed to completion, Matarbari-2 would have further official development assistance (ODA)
had an output of 1.2 GW. loan support.”
Local media in Bangladesh quoted Power Japan will instead be assisting developing
Minister Nasrul Hamid as saying the decision nations to move towards lower levels of green-
had been taken by Japan “to reduce its carbon house gas (GHG) output by turning to renewa-
footprint.” ble power options.
As a silver lining in the wake of the cancella- The decision announced by the Japanese
tion of financing, Hamid stated on social media government was not altogether unexpected.
that he had recently met with the vice president Companies in Japan have in recent years been
of the Japan International Cooperation Agency scaling down links to overseas coal investments
(JICA), Keiichiro Nakazawa, to discuss renewa- in response to criticism from domestic and for-
ble energy collaboration. eign-based climate groups.
In the meantime, it is understood Dhaka will Household names, such as Sumitomo and
now turn to liquefied natural gas (LNG) sourced Toshiba, as well as Marubeni, another major
output to make up any shortfall in power player in Southeast Asian coal development in
supplies. recent decades, have all shied away from new
Just last year, the Bangladeshi government projects.
cancelled the construction of 10 coal power On the ground in Indonesia, the state-owned
plants on the back of efforts to reduce its own electricity utility PLN, operator of other coal
carbon footprint as well as rising coal costs. As a plants in Indramay, announced its own commit-
result, at present just under 10% of Bangladesh’s ment towards the nation’s net-zero goal.
power is sourced from coal. “In that (net-zero) roadmap, it’s clear that
“We celebrate that Bangladeshis will not have PLN will no longer build new coal-fired power
to suffer from the burden of air pollution, toxic plants, and thus doesn’t need funding for new
mercury pollution and increased debt [that] this plants,” said Gregorius Adi Trianto, PLN’s
plant would have caused,” said Roger Smith, the vice-president of corporate communication.
Japan director for environmental group Mighty To this end, “PLN took the same initiative to
Earth. stop loans as a part of (our own) move towards
Smith continued: “this is an inspiring victory achieving [the] Carbon Neutral 2060 target for
that brings Japan’s era of overseas coal finance to the sake of creating an Earth that’s cleaner and
an end.” more hospitable for future generations.”
Financing for another coal-fired power plant, Prior to Japan’s decision to end financing
the Indramayu facility in Indonesia, was also in both Bangladesh and Indonesia, Tokyo had
cancelled by Tokyo. A decision on the future accounted for around $3.5bn of the total $6bn
of the site will be made in the coming weeks paid by G7 member nations toward coal devel-
by Indonesia’s energy and mineral resources opment in 2019.™
ministry.

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