Almost all development banks have pledged to cut coal investment, data shows
SHANGHAI, Nov. 2 (Reuters) – Almost all internationally available development finance now pledges to cut or end investment in coal-fired power plants after China and the G20 decide to end to support new projects abroad, new research revealed Tuesday.
Just before the start of a new round of climate talks in Glasgow, G20 countries pledged on Sunday to end funding for all coal-fired power plants abroad. This followed a similar pledge made by Chinese President Xi Jinping to the United Nations General Assembly in September.
G20 commitment means 99% of all development finance institutions have committed to reducing coal investments and increasing energy support, according to new study from Boston University’s Global Development Policy Center. renewable.
“If these institutions live up to their commitments, it will be easier for developing countries to find official funding for the phase-out of renewables and coal than for the construction of new coal-fired power plants,” said Rebecca Ray, principal investigator at the GDP Center and one of the study authors.
The study indicates that only three main “resisters” remain – the Development Bank of Latin America, the Islamic Development Bank and the New Development Bank – although many of the main shareholders of these institutions are among the groups. the G20 commitment.
Xi’s announcement in September that China would no longer be involved in overseas coal projects was the most significant change to date, depriving coal-fired power from its major backers, including the Bank. Development Bank of China and the Export-Import Bank of China, according to the study. .
The move appears to have had an immediate effect on the country’s financial institutions, with the Bank of China pledging to end new overseas coal and power projects from October. Read more
An expert involved in developing guidelines to decarbonize Chinese Belt and Road investments said Chinese financial institutions are aware of declining demand for coal-fired electricity, which is making it easier to implement the Xi’s order.
“They are pretty serious about it,” said the expert, who declined to be named due to the sensitivity of the subject. “They are not looking for excuses to continue the projects, they are looking for reasons not to continue.”
With coal already struggling to compete with renewables – and many analysts predict the sector will eventually consist of billions of dollars in “stranded assets” – China’s decision to pull out represented a rare alignment of political, economic and climate interests, analysts said.
“The economy has changed and their experience with financing coal with the Belt and Road initiative was not good – there are already issues with host countries defaulting on payments,” said Matt Gray, group analyst. reflection on the climate TransitionZero. “I think they now have the political signals (to stop investing) that they’ve been asking for forever.”
Reporting by David Stanway. Editing by Gerry Doyle
Our Standards: The Thomson Reuters Trust Principles.