At the Climate 2020 website today, my colleague Ryan Brightwell has been assessing the ‘green-ness’ of green bonds, an increasingly popular financial instrument intended to be all about generating investment in environmentally sustainable projects. Given their rise to prominence, Ryan describes these bonds as ‘the new black in the world of environmental finance’, and mentions how the proceeds of one green bond issued by the Export-Import Bank of India are being deployed to develop a railway link vital to the operations of the proposed Rampal coal plant project in Bangladesh. This post digs deeper into Exim Bank’s green bond deal – one with very black implications for the world-renowned Sundarbans mangrove forest and its inhabitants.
With November’s COP 22 meeting in Marrakech fast approaching, the commitments made by French banks in 2015 à propos their financing of the coal sector are being seen for what they are: highly mixed. For one thing, Natixis confirmed, in its first such publicly declared sectoral policy, that it is ending project financing for all new coal plants – worldwide. Yet, in an indication of gaping flaws in their climate commitments adopted just before COP 21 in Paris last year, Crédit Agricole and Société Générale are involving themselves in several coal power projects, most notably in Indonesia.
Friends of the Earth France and BankTrack believe that Crédit Agricole and Société Générale must immediately withdraw from projects which are inconsistent with the Paris Agreement, and they must also, along with BNP Paribas, face up to and engage in forthcoming climate events by bringing a definitive end to all of their financing for coal projects.
The gloves are now well and truly off in the Rampal coal plant saga taking place in Bangladesh. The country’s prime minister, Sheikh Hasina, has just recently placed coal protesters in danger by saying they are equivalent to the terrorists who murdered 24 people in a Dhaka café in July. The assumption has to be that resorting to this kind of mud-slinging is a sure sign that you’re defending the indefensible – and, too, that the justifications being put up for your ‘dream project’ by the project’s promoters are now being revealed to be seriously deficient.
To wit, we’re publishing a new, detailed and – necessarily, very necessarily – long rebuttal from campaign colleagues at the National Committee for Saving the Sundarbans to threadbare and often misleading assertions from the Bangladesh-India Friendship Power Company Ltd (BIFCL) which have been circulating over the summer.
In short: science, we believe, trumps sloppiness and spin.
The dust has now settled on this year’s bank AGM season in Europe. However, with new, progressive coal financing policy announcements thin on the ground, it’s been more a case of the dust gathering on the coal finance toolkits of most of Europe’s big banking names. And this in spite of the usual concerted advocacy from coal campaigners and the growing urgency for the banks to quit coal.
BankTrack issued five new coal banks briefings for the 2016 AGM season, analysing the advances which took place last year in the coal policies of banks such as Crédit Agricole and Royal Bank of Scotland, and pointing out some of the loopholes which remain with the potential to leave a host of climate destructive investments firmly on the banks’ radar.
Published earlier this week by BankTrack, Rainforest Action Network, the Sierra Club and Oil Change International, the Fossil Fuel Finance Report Card 2016 – entitled ‘Shorting the Climate’ – has already been making waves. Thanks to Naomi Klein, Bill McKibben and many others for pushing #shortingtheclimate out there on social media: it’s vital that the call goes out widely to the global banking sector urging an end to its multi-billion dollar support for fossil fuels.
Big congratulations to Zelena akcija/Friends of the Earth Croatia following yesterday’s news that the long-proposed 500 MW Plomin C coal plant project in the Istrian peninsula is dead in the water.
Zelena akcija has been fighting the Plomin C project plans for five years. Over the last couple of years BankTrack has also campaigned on this ‘dodgy deal’, in tandem with CEE Bankwatch Network and Friends of the Earth France, owing to Crédit Agricole’s advisory role in the controversial €800 million investment and its expected potential key role in the eventual project financing.
On March 18 DTEK, the Ukrainian power giant and the country’s biggest coal company, announced its financial results for 2015, and they painted a very bleak picture. The company’s net electricity output dropped 20%, electricity exports were down by 55%, and its debt was confirmed as having reached USD 2.2 billion.
Just the week before, on March 10, Fitch Ratings downgraded DTEK’s credit rating from ‘C’ to ‘RD’ – restricted default, which is Fitch’s final rating before bankruptcy when a company has defaulted on a bond, loan or another financial obligation. Half of DTEKs excessive and decrepit coal-fired power plants are now standing idle and turning into scrap metal.
Swiss bank UBS has been making headlines in recent weeks as the latest major international bank to be facing the embarrassment of a legal probe into alleged tax malfeasance. As a formal investigation in Belgium opens into the practices of UBS, the prosecutor’s office in Brussels claimed at the end of February that “UBS is suspected of forming a criminal organization, money laundering and serious tax fraud.”
Far less publicity, however, has surrounded the Swiss bank’s belated catching up with the rush of forward momentum from major banks which announced new coal financing policies in 2015. UBS, currently BankTrack’s number 13 ‘coal bank’ with over €11 billion in financing to the coal sector between 2005 and April 2014, has also, it would appear, started to see the light on coal.
In spite of the Paris Agreement and the European Union’s 2030 greenhouse gas emissions reduction target, Polish state-owned and private companies are pushing on with plans to develop a string of new open-pit lignite mines.
And while local communities on the front line of these potentially destructive projects continue to resist them, many well-known banking names – including some which have recently made encouraging, if belated, moves towards the coal finance exit doors – remain anchored in the Polish coal sector, and appear more than willing to prop up an industry which now appears to be on its last legs.
By Greig Aitken and Yann Louvel, BankTrack, 4 February 2016
As we’ve been settling into the new year and wondering how visible and – crucially – rapid any genuine follow through from the words of the Paris climate summit would be, there’s been a nagging concern at the back of our minds: in what’s supposed to be these new, ambitious ‘1.5 degree Celsius limit’ times, what’s going to be the first major new coal installation investment of 2016, and who’s going to be bankrolling it?