World Bank se­cretly fi­nances Asian ‘coal boom’, says re­port

The Myanmar Times - - International Business -

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 the or­gan­i­sa­tion In­clu­sive De­vel­op­ment In­ter­na­tional.

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 pri­vate­sec­tor arm, the In­ter­na­tional Fi­nance Corporation, ac­cord­ing to the re­port.

In re­sponse to ques­tions from AFP, Fred­er­ick Jones, an IFC spokesper­son, 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 to in­vest in re­new­able en­ergy, not coal,” he said.

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

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

The re­port’s re­lease co­in­cided with the start of this week’s high-pro­file an­nual meet­ings of the 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 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 end-run around en­vi­ron­men­tal safe­guards that ap­ply to projects di­rectly sup­ported by the IFC.

The IFC does not iden­tify the end re­cip­i­ents of fi­nanc­ing re­ceived by such in­ter­me­di­aries. How­ever, through an anal­y­sis of records, the re­port iden­ti­fied 56,127 megawatts of new coal ca­pac­ity funded in­di­rectly by the IFC.

These in­cluded the planned 1360-megawatt Ram­pal power sta­tion in Bangladesh, to be si­t­u­ated on the edge of the sprawl­ing Sun­dar­bans man­grove for­est, which is home to en­dan­gered species and sup­ports the liveli­hoods of 2 mil­lion peo­ple.

The re­port said the World Bank de­clined to sup­port the project but six lo­cal banks, all IFC-fi­nanced, agreed to sup­port it. –

Photo: EPA

A file pho­to­graph shows a Thai fish­er­man and the coal-fired power plant at Mae Moh in the north­ern prov­ince of Lam­pang prov­ince, Thai­land.

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