‘World Bank in­di­rectly fu­elling Asia coal boom’

> ‘Dirty’ power plants re­ceived fi­nanc­ing from in­ter­me­di­aries backed by global lender, says group

The Sun (Malaysia) - - SUNBIZ -

WASH­ING­TON: The World Bank is in­di­rectly fi­nanc­ing a boom in some of Asia’s dirt­i­est coal-fired power gen­er­a­tion de­spite com­mit­ments to end most fund­ing for the sec­tor, a de­vel­op­ment ad­vo­cacy group charged yes­ter­day.

The power plants, which con­trib­ute to cli­mate change and de­for­esta­tion as well as pre­ma­ture deaths due to ill­ness, are crop­ping up from Bangladesh to the Philip­pines, all with fi­nanc­ing pro­vided by fi­nan­cial in­ter­me­di­aries sup­ported by the Bank, said a re­port pro­duced by or­gan­i­sa­tion In­clu­sive De­vel­op­ment In­ter­na­tional (IDI).

In a pol­icy shift in 2013, the Bank said it would end vir­tu­ally all sup­port for the creation of coal-burn­ing power plants, sup­port­ing them only in “rare cir­cum­stances” where there are no vi­able al­ter­na­tives.

How­ever, since that pledge, 41 coal projects have re­ceived fund­ing from banks and in­vest­ment funds sup­ported by the World Bank’s pri­vate-sec­tor arm, the In­ter­na­tional Fi­nance Cor­po­ra­tion (IFC), ac­cord­ing to the re­port.

In re­sponse to ques­tions from AFP, Fred­er­ick Jones, an IFC spokesman, said the global lender took the re­port se­ri­ously.

“It raises im­por­tant long-term ques­tions about how we need to cre­ate stronger mar­kets for clean en­ergy and cre­ate in­cen­tives for coun­tries and the pri­vate sec­tor not to invest in coal, but rather in re­new­able en­ergy,” he said.

Jones added that since 2005 the IFC had al­ready in­vested more than US$15 bil­lion (RM62 bil­lion) in re­new­able en­ergy, en­ergy ef­fi­ciency and other ar­eas, and had mo­bilised US$10 bil­lion more.

How­ever, Jones con­ceded that IFC pol­icy did not pro­hibit eq­uity clients from fund­ing coal plants, mean­ing the in­sti­tu­tion might be in­di­rectly ex­posed to the in­dus­try.

This is de­spite the fact that IFC loans to fi­nan­cial ser­vices in­dus­try play­ers are not in­tended to fi­nance coal-re­lated projects and tar­geted lend­ing is “ringfenced” to pre­vent this, Jones said.

The re­port’s re­lease co­in­cided with the start of this week’s high-pro­file an­nual meet­ings of the World Bank and the In­ter­na­tional Mone­tary Fund, as the world’s fi­nance chiefs gather to dis­cuss ef­forts at poverty re­duc­tion.

Cam­paign­ers in re­cent years have been sharply crit­i­cal of the IFC’s sup­port for third par­ties in the fi­nan­cial ser­vices sec­tor, such as banks and in­vest­ment funds, say­ing they can rep­re­sent an en­drun around en­vi­ron­men­tal and so­cial safe­guards that ap­ply to projects di­rectly sup­ported by the IFC.

Fi­nan­cial-sec­tor lend­ing now ac­counts for 52% of the IFC’s long-term com­mit­ments, ac­cord­ing to IDI, which jointly pro­duced the re­port with other ad­vo­cacy or­gan­i­sa­tions in­clud­ing the Bank In­for­ma­tion Cen­ter and Ac­count­abil­ity Coun­sel.

Pic­ture of ING head­quar­ters on Av­enue Marnix, Brus­sels, dur­ing an ex­tra­or­di­nary works coun­cil meet­ing re­gard­ing a ma­jor re­struc­tur­ing of the bank­ing in­surance group yes­ter­day.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.