A new report published today by Recourse with Trend Asia in Indonesia, Philippine Movement for Climate Justice, and Korea Sustainability Investing Forum, examines IFC’s implementation of its Green Equity Approach.
“We’ve uncovered an encouraging – even a radical – trend over the past year with IFC explicitly excluding coal in the vast majority of its financial intermediary lending. This move sends a strong signal that the era of coal financing is over,” said report author Kate Geary, Co-Director of Recourse.
IFC’s new GEA aims to support equity clients to reduce their coal exposure by 50% by 2025 and to zero by 2030. But Recourse’s report discovered that IFC’s first GEA client – Indonesia’s Hana Bank – is part of a conglomerate “up to its neck in coal” and that Hana Indonesia itself is now investing in one of the biggest new coal complexes on the planet, Java 9 and 10. The project will release 10 million cubic tonnes of carbon dioxide each year, the equivalent to the annual emissions of Thailand or Spain, in an Indonesian region that already has 52 huge coal-fired power plants.
Yuyun Indradi, Executive Director of Trend Asia said, “it is obvious that the new Java 9 & 10 plants will bring more disaster in terms of environmental, social and health issues, in an area already covered with coal fired power plants and industries. It does not need to be burdened with more. The Java and Bali grid is already suffering from 40% oversupply of electricity. Funding such projects will not help our peoples, our country and our planet. Withdrawing that funding and redirecting it for renewable energy is urgently needed.”
The report urges IFC to proceed with a phase-out plan for coal plants it has already backed in the Philippines and to challenge Hana Indonesia and its parent bank Hana Korea to reduce their significant coal exposure.
Ian Rivera, National Coordinator of the Philippine Movement for Climate Justice said, “IFC’s Green Equity Approach is a critical shift toward the total decarbonisation of its investments and heralds the end of coal. While we laud this bold move, climate vulnerable countries like the Philippines want to see this policy extended to cut off all development financing of climate-busting projects, in order to keep the rise in global temperatures to below 1.5 degrees Celsius.”