Standard Bank has announced that it will only finance coal-fired power plants that meet the bank's set emission and plant size parameters.
The bank revealed last week that it has adopted a group-wide policy on lending to coal-fired power projects and is in the process of developing a policy on lending to coal-mining operations.
Standard Bank's Coal-Fired Power Finance Policy stipulates that only coal-fired power plants with emissions between 750 and 850 g CO2/kWh qualify for finance. Read the full policy document here.
The bank said in a statement: “Coal-fired power has historically been an important source of energy supply in several countries in Africa including South Africa, and the Paris Agreement recognises that emission reduction will take longer for developing countries. There is, therefore, a clear requirement for the bank in its financing of power projects, to balance the need for broad access to electricity, with the choice of technology used to mitigate the risks of climate change as embodied in the Paris Agreement.”
Plants that exceed certain emissions levels and installed capacity will not be eligible for financing under any circumstances, while in other cases only projects in International Development Association (IDA) countries will be eligible, and below certain emissions thresholds, coal-fired plant projects can be funded anywhere.
IDA countries suffer from the lowest gross national income, have a troubled creditworthiness, or are from the lowest per capita income.
Earlier this year at Standard Bank’s Annual General Meeting, climate-conscious shareholders compelled the bank to adopt and publicly disclose a policy on lending to coal-fired power projects and coal mining operations.
Resolution 10.2 received 55% of shareholder votes, and is therefore binding on the company.
This is the first time that a South African bank – or any listed South African company – has faced a shareholder resolution on a climate-related issue.
Standard Bank’s board had recommended that shareholders vote against it.
