Page 5 - AsiaElec Week 01 2021

AsiaElec COMMENTARY AsiaElec

Access to finance
A key driver of this vanishing project pipeline Indonesia, China, Morocco and Malaysia by
is declining access to finance as major investors 2030.
abandon their exposure to coal, often to meet the The Japanese government also said in July
growing green and environmental, social and 2020 that it would limit its support for coal pro-
governmental (ESG) demands of institutional jects abroad to ultra-supercritical coal plants in
and private equity investors worldwide. countries that had a decarbonisation strategy.
GEM said that since 2015, banks and compa- This falls short of ending all coal financing
nies in Singapore, South Korea and Japan have and export guarantees for coal, and Japan is
been the source of 44% ($22.6bn) of the $51.8bn still officially supporting such projects as Vung
in coal power capacity funding that has reached Ang 2 in Vietnam, Indramayu in Indonesia and
financial close in Bangladesh, Indonesia, Phil- Matarbari in Bangladesh.
ippines and Vietnam. Financial institutions in A crucial factor is that China, Japan and
all three countries have recently announced that South Korea have all recently strengthened their
they will no longer finance coal plants. commitments under the Paris climate agree-
Major push-backs from coal include Malay- ment, with South Korea and Japan committing
sia’s CIMB announcing in December that it to be carbon-neutral by 2050, and China by
would phase out coal financing, having invested 2060.
$2.6bn in coal over the last 10 years. A key issue is Chinese support, which stood
In 2019, Singapore’s DBSBank, OCBC Bank at 30% ($15.5bn) of the $51.8bn in coal power
and United Overseas Bank announced that capacity funding that has reached financial close
they would stop financing new coal-fired power since 2015 in Bangladesh, Indonesia, the Philip-
plants. pines and Vietnam, according to GEM figures.
DBS and OCBC, however, made exceptions Beijing is also reconsidering support for coal
for the Van Phong 1 and Vung Ang 2 projects projects abroad, as it too must look for ways to
in Vietnam and Jawa 9 and 10 in Indonesia, to meet its Paris targets.
which they were already committed. “Taken together, the cancellations are a
Japan’s Mizuho, Sumitomo Mitsui and Mit- major blow to coal’s hopes in Asia,” GEM said
subishi UFJ Financial Group (MUFG) banks in its report.
have all announced withdrawals from coal. The falling cost of renewables is also making
Marubeni has withdrawn from three regional coal projects everywhere more expensive than
coal projects since announcing its coal exit in wind or solar, making any large coal-to-power
2019, while Mitsui said in October that it would projects a bad bet for both purely financial as
sell all its stakes in coal-fired power plants in well as wider ESG terms.™

Week 01 06•January•2021 www. NEWSBASE .com P5