This content is no longer being updated.

Big Talk, Small Change

Testing the effect of banks’ coal power policies on Southeast Asian power

October 2018: A new Market Forces study examines recently published or updated coal power policies of key banks financing coal power in Southeast Asia, finding many have limited or no material impact.

Southeast Asia has the third largest pipeline of coal power projects in the world, just behind China and India, with close to 75 GW in development. Oxford University researchers recently found that even if the world’s entire power plant pipeline was cancelled, “~20% of global capacity would need to be stranded to meet the climate goals set out in the Paris Agreement.” Proposed Southeast Asian coal-fired plants spell the difference between a habitable planet and global warming entailing increased flooding of coastal areas, worsening drought, the near total demise of coral reef systems and hundreds of millions more people living in poverty.

Banks that support new coal power are risking our collective future. Recognising the need for change, global banks have recently announced policies restricting financial support for coal-fired power plants. Among the list in 2018 were seven banks that have been highly supportive of the coal-fired power industry in Southeast Asia: Standard Chartered, HSBC, Singaporean banks – DBS and OCBC and Japanese banks – SMBC, MUFG and Mizuho.

The integrity of these policies rests upon whether they are genuinely applied and the material outcomes.

Market Forces’ analysis of materiality shows:

  • HSBC, DBS and OCBC’s policies have no known material effect on their support for new coal-fired power plants.
  • If applied to projects yet to reach financial close, Standard Chartered’s policy should rule it out of all pipeline coal-fired projects including Vung Ang 2 and Vinh Tan 3.
  • SMBC, MUFG and Mizuho’s policies should rule each out of between 35% to 51% of their pending coal-fired power deals in Southeast Asia.
  • Collectively, these banks are financially supporting 10.1 GW of new coal-fired power capacity in Southeast Asia that would emit almost 1.6 billion metric tonnes of CO2.
  • Four projects in Vietnam with a capacity of 5.7 GW, which would emit a collective 887 million tonnes of CO2 over their lifetimes, should lose commitments from at least one bank.

Key findings

Pipeline of coal-fired power plants in ASEAN (by capacity, MW) from which banks should withdraw following 2018 policy announcements (Table 1)

BankWithdraw (%)WithdrawRemainUnclearTotal
Standard Chartered Bank100%3180003180

Proportion of coal-fired power plants in ASEAN (by capacity, MW) from which banks should withdraw following 2018 policy announcements

  • Standard Chartered 50100% 50100%
  • HSBC 0% 0%
  • DBS 0% 0%
  • OCBC 0% 0%
  • MUFG 51% 51%
  • Mizuho 35% 35%
  • SMBC 35% 35%

Market Forces examined the implications of each bank’s new policy when applied to the pipeline of coal-fired power projects it was involved in on and since the date of each announcement. Market Forces used data from IJGlobal and Thomson Reuters to produce this analysis. Information relating to the technical specifications of coal plants was obtained from these sources, as well as publicly available information, including information published by project sponsors.

In the table:

  • “Withdraw” refers to projects that the bank would have to withdraw from if its policy was applied as stated.
  • “Remain” refers to projects that the bank would remain involved in if its policy was applied as stated.
  • “Unclear” refers to projects where there is insufficient information (e.g. about a project, or the policy itself) to determine how the policy would apply to the particular project.

Standard Chartered

On 25 September, UK-headquartered bank Standard Chartered made headlines when it announced it “will not directly finance any new coal-fired power plant projects, including expansions, in any location.”

At the time the policy was released, Standard Chartered was involved in banking syndicates for two proposed coal-fired power plants in Vietnam; Vung Ang 2 and Vinh Tan 3. The bank’s involvement in other proposed coal-fired plants, such as the 2,000MW Jawa-9&10 (Banten Suralaya) in Indonesia, remains unclear and Standard Chartered refuses to clarify its position related to these projects. Market Forces expects there will be a process for Standard Chartered to extract itself from the banking syndicates of coal power projects yet to be financed.


On 20 April, HSBC announced “it will now stop financing new coal-fired power in all countries around the world apart from Bangladesh, Indonesia and Vietnam.”

The policy states:

“Global Businesses must not provide project financing or general purpose lending where the majority of such financing is used for:

a) New coal-fired power plant projects[*], subject to very targeted exceptions of Bangladesh, Indonesia and Vietnam in order to appropriately balance local humanitarian needs with the need to transition to a low carbon economy. Consideration of any such exception is subject to:

(i) independent analysis confirming the country has no reasonable alternative to coal;

(ii) the plant’s carbon intensity being lower than 810g CO 2 /kWh; and

(iii) financial close on the project being achieved by 31 December 2023.

HSBC will phase out, by 31 December 2019, its lending for the development of new coal-fired power plant projects in high-income countries[**]”

* “New coal-fired power plants include completely new plants, major expansions to existing plants and specific existing plants to which HSBC does not already provide financial services (that is, such support would be “new to HSBC”). In the event that carbon capture and storage or equivalent technology becomes commercially viable and utilised on a new plant, any financial support is subject to case-by-case analysis and clearance as Restricted Business.”

** “Country income classifications are defined by the World Bank Group.”

At the time of HSBC’s announcement it was involved in providing financial services for the Long Phu 1 and Vinh Tan 3 coal power projects in Vietnam. The policy has not and does not commit HSBC to withdraw from these or any other known pipeline coal-fired plants it was involved with on the date of its announcement. Given a lack of evidence that HSBC has refused to finance any coal plant due to its policy, it appears the policy is entirely immaterial.

Singapore Banks

Following a number of policies and statements from Singapore’s banks and their representatives throughout the year, Market Forces analysed the materiality of these policies in July.

Unfortunately, it appears none of Singapore’s banks adopted policies that would materially alter their involvement in any coal-fired power plants.


On 26 January, DBS announced it “will stop financing new greenfield coal fired power generation projects in OECD/developed markets. In developing countries, DBS will change its focus to more efficient technologies.”

The bank later defined ‘more efficient technologies’ as ‘supercritical combustion technologies or above’, stating: “DBS is committed to directing our financing to more efficient technologies (supercritical combustion technologies or above) in non-OECD /developing markets.”

On 20 June 2018, DBS Chairman Piyush Gupta said “local [Singaporean] banks have also committed, at a minimum, to discontinue new financing of green-field coal-fired power plants which use less efficient sub-critical combustion technologies.”

Market Forces interprets these statements to mean DBS will no longer finance greenfield subcritical coal-fired power, effective 26 January 2018.

Market Forces is unaware of DBS being involved in new greenfield coal-fired power plants in developed countries as at or after its announcement on 26 January. In developing countries, DBS is linked to Vung Ang 2 in Vietnam, and Jawa-9 and Jawa-10 in Indonesia. DBS’s policy does not commit it to withdraw from Jawa-9 and Jawa-10, as these plants would employ ultrasupercritical technology. It is unclear how the policy would apply to Vung Ang 2, as the technology for this plant is unknown. Given a lack of evidence that DBS has refused to finance any coal plant due to its policy, our assessment of DBS’ policy is that it is immaterial.


It is unclear when OCBC announced its policy, which reads:

“We prohibit any new corporate financing or project financing for coal-fired power plants that use:

(a) Subcritical efficiency technology, and/ or

(b) Lignite (brown coal) as the main fuel source.”

When Market Forces analysed OCBC’s policy in July it wasn’t aware of the bank’s involvement in any pipeline coal-fired projects. However since then, OCBC reportedly joined the lending syndicate for the Vung Ang 2 project in Vietnam. The technology employed by that plant is unknown and therefore it is unclear whether OCBC is able to provide finance, though presumably it wouldn’t have joined the syndicate if the plant were subcritical. As such, and given a lack of evidence that OCBC has refused to finance any coal plant due to its policy, our assessment of OCBC’s commitment is that it is immaterial.

Japanese Banks

MUFG, SMBC and Mizuho all adopted policies that would in effect mean they can only provide financial support to ultrasupercritical (USC) coal-fired power plants.

Market Forces analysed the materiality of these policies in late August as it related to the banks’ funding of pipeline coal-fired power plants globally. The analysis presented on this page narrows the focus to plants in Southeast Asia and finds that all three must withdraw from the 1,320 MW Van Phong 1 project in Vietnam and MUFG from Long Phu 1.


SMBC is understood to be financially supporting 6,370 MW of pipeline coal-fired power capacity, 3,720 MW (58%) of which is located in Southeast Asia. Withdrawal from Van Phong 1 represents 35% of SMBC’s involvement in prospective Southeast Asian coal power projects.


aMUFG is understood to be financially supporting 5,220 MW of pipeline coal-fired power capacity, 4,920 MW (94%) of which is located in Southeast Asia. MUFG should withdraw from both Long Phu 1 and Van Phong 1, representing 51% of MUFG’s involvement in prospective Southeast Asian coal power projects.


Mizuho is understood to be financially supporting 4,020 MW of pipeline coal-fired power capacity, 3,720 MW (93%) of which is located in Southeast Asia. Withdrawal from Van Phong 1 represents 35% of Mizuho’s involvement in prospective Southeast Asian coal power projects.

Climate impacts of coal power projects

Of these banks’ collective involvement in 8 coal-fired power plants (10.1 GW) in Southeast Asia, we find that 4 with a capacity of 5.7 GW (56%) would see involvement withdrawn from one or more banks. These plants include Long Phu 1, Van Phong 1, Vung Ang 2 and Vinh Tan 3, which would collectively emit 887 million tonnes of CO2 over their lifetimes.

Lifetime CO2 emissions of pipeline coal power plants in ASEAN involving any of; Standard Chartered, HSBC, DBS, OCBC, SMBC, MUFG or Mizuho (Table 2)

PlantCapacity (MW)Plant CountryTechnologyLifetime CO2 (MT)Banks in the study that are reportedly linked to these projectsPolicies force at least 1 bank to withdraw
Long Phu 11200VietnamSupercritical185HSBC, and MUFGY (MUFG)
Nam Dinh 11200VietnamUnclear*197Mizuho, and MUFG--
Van Phong 11320VietnamSupercritical204Mizuho, MUFG, and SMBCY (Mizuho, MUFG and SMBC)
Vinh Tan 31980VietnamSupercritical306Standard Chartered and HSBC Y (Standard Chartered)
Vung Ang 21200VietnamUnclear*192DBS, OCBC, Standard Chartered, Mizuho, MUFG, and SMBCY (Standard Chartered)
Vung Ang 31200VietnamUnclear*190SMBC--
Total101001583887 MT CO2

* Market Forces contacted the sponsors of these projects to clarify the technology type but this information was not provided by the deadline.

What’s Next?

It is imperative that banks such as Standard Chartered, MUFG, SMBC and Mizuho apply their policies and remove themselves from relevant projects that have not yet reached financial close.

MUFG has indicated it is already reviewing its policy and other banks included in this analysis will likely do the same. Banks should use the review process to strengthen their commitments by ruling out involvement in new coal-fired power plants globally, and a commitment to align its loan book and other investments with the goals of the Paris Agreement on climate change.

Instead of engaging in ‘greenwash’, DBS, OCBC, and HSBC should have implemented policies with material outcomes and should now revise their positions to rule out involvement in new coal-fired power plants globally. HSBC is reviewing its policy and must be encouraged to close the loopholes permitting finance of coal power in Bangladesh, Vietnam and Indonesia.

By continuing to support new coal power plants, DBS, OCBC, HSBC, Mizuho, MUFG and SMBC have lost touch not only with the social and financial realities of climate change, but with their global peers such as Natixis, Société Générale and even Standard Chartered. These banks’ policies must reflect the global reality and do what is necessary to stop the catastrophic effects of climate change.