Page 8 - AfrElec Week 20 2021

AfrElec FINANCING AfrElec

Nedbank announces plan to stop

funding coal, oil and gas projects

AFRICA SOUTH Africa’s Nedbank revealed last week power sources and the replacement of coal and
that it had decided to phase out funding for all petroleum product-fired power stations with
fossil fuel projects. gas-fired plants.)
In a statement, the financial services group According to the statement, Nedbank is tak-
said that it had taken this step as part of a wider ing this step to uphold its pledge to bring its busi-
effort to reduce its net carbon emissions to ness into line with the goals stated in the Paris
zero by 2045. It declared that it would work to climate agreement. “We recognise that meet-
achieve this goal by halting funding to organi- ing the Paris agreement objectives will require,
sations involved in thermal coal mining by 2025 among other things, full decarbonisation of the
and direct funding for crude oil and natural gas global energy system by mid-century,” it said.
exploration. “An orderly exit from fossil fuel financing will be
In practice, the statement explained, this cam- necessary well before 2050, given the long life-
paign will entail restricting the amount of financ- times of the physical assets.”
ing offered to thermal coal mining, along with This is not the bank’s first move in this direc-
the trade and infrastructure related to thermal tion. Nedbank had already announced last
coal mining, to 1% of its aggregate total lending month that it intended to stop providing funding
by 2025. The share will then be reduced further for coal projects. The new policy goes further, as
to 0.5% by 2030, it said. it also targets oil and gas – and, as the shareholder
Nedbank also indicated that it was not plan- activist organisation Just Share noted last week,
ning to abandon gas entirely. The group will sets a deadline of 2045 rather than following
continue to provide financing for gas production other banks and companies that are aiming to
“where it will play an essential role in facilitating reach net zero by 2050.
the transition to a zero-carbon energy system by Mike Davis, the group’s CFO, described
2050,” the statement noted. It stressed, though, the new policy as capable of balancing climate
that the bank was dedicated to bringing its level imperatives with the demand for reliable energy
of exposure to fossil fuels down to zero by 2045. supplies. “Nedbank’s energy policy serves to
(It also made provisions for some exceptions, guide the bank’s transition away from fossil fuels
including the integration of gas-fired facili- while still providing appropriate support to exist-
ties into renewable energy schemes as back-up ing energy requirements,” he commented.™

P8 www. NEWSBASE .com Week 20 20•May•2021