Media release: New Japanese bank policies rule out a third of overseas coal plant finance

28 August 2018: New coal policies should rule out providing financial support to close to a third of the coal-fired power stations (by capacity) currently under consideration by Japan’s three major commercial banks, according to a new analysis released today by environmental finance group Market Forces.

In implementing their new policy, Sumitomo Mitsui Banking Corporation (SMBC) should be required to end discussions on providing financial support to three coal stations, Morupule in Botswana, Tavan Tolgoi in Mongolia and Van Phong 1 in Vietnam, all of which would be built with highly polluting ‘subcritical’ or ‘supercritical’ technology.

Alongside SMBC, the policies of Mitsubishi UFJ Financial Group, Inc. (MUFG) and Mizuho Financial Group (Mizuho) would also require that the banks withdraw from potential financial support to Morupule in Botswana and Van Phong 1 in Vietnam.

Van Phong 1, which financial sources state is in line to reach financial close shortly, will be the first test of the banks’ new policies.

Whilst information has not been made publicly available, it is also highly likely a further three stations in Vietnam will also fail to meet the new sustainability standards.

“The new coal policies should remove funding for some of the most polluting coal power stations currently in the global pipeline,” said Market Forces Analyst Bernadette Maheandiran.

“Japanese institutions are among the largest financiers of polluting power overseas, so this would be a critical step to a cleaner future.”

“However, the credibility of the new policies rests on whether they are followed through.

“We call on the banks to confirm they are honouring their new policies and will withdraw from syndicates to new coal power plants that fail to satisfy the standards.”

Coal-Fired Power StationCountryTechnology TypeSMBC Involvement?SMBC Policy Compliant?MUFG Involvement?MUFG Policy Compliant?Mizuho Involvement?Mizuho Policy Compliant?
KoheliaBangladeshUltrasupercritical

MatabariBangladeshUltrasupercritical

MorupuleBotswanaSubcritical

Tavan TolgoiMongoliaSubcritical

Toyo-Thai - Inn Din, Mon StateMyanmarUltrasupercritical

Toyo-Thai - Hpa-An, Kayin StateMyanmarUltrasupercritical

Van Phong 1VietnamSupercritical

Vung Ang 3VietnamUnknown

Vung Ang 2VietnamUnknown

Nam Dinh 1 VietnamUnknown

SMBC, MUFG and Mizuho are collectively in line to provide financial support for a total of ten coal-fired power projects yet to reach financial close in Vietnam, Myanmar, Mongolia, Botswana and Bangladesh.

Totalling 10.1 GW of coal-fired power if built, the stations would produce total CO2 emissions of 1.6 billion tonnes.

“In 2015, the World Bank called the coal expansion in Southeast Asia a ‘disaster for the planet’ which threatens to overwhelm the Paris climate deal,” said Maheandiran.

“By fully implementing their new policies, Japanese banks would be taking an important step forward.  But it is only the first step.  It is imperative that SMBC, MUFG and Mizuho align with the global shift against coal finance, including Japanese insurance giants Daiichi Life and Nippon Life, and stop funding all new coal power globally.”

Read the full analysis






For more information, please contact report author, Bernadette Maheandiran on +61 481 343 455 or Bernadette@marketforces.org.au