This content is no longer being updated.

All three of Singapore’s banks now have coal commitments, but what has changed?

18 July 2018

Since the start of 2018 DBS, OCBC and UOB have all released policies relating to their investments in coal-fired power, or signalled intentions about their future lending to this sector.

This analysis explores these policies and statements, putting them in context of other moves by banks to limit lending to the coal sector, and testing their material impact.


Coal-fired electricity is the single-biggest source of CO2 emissions worldwide. The ASEAN region, where Singapore’s major banks are dominant, is host to some of the world’s largest pipelines for new coal power stations, including Vietnam (45 GW) and Indonesia (34 GW).

Coal-fired power is also the source of significant damage to the lives, livelihoods and health of people living in the ASEAN region. In Vietnam alone, a significant rise in air pollution due to coal was responsible for 4,300 premature deaths in 2011. That number is estimated by researchers at Harvard University to rise almost five-fold to 19,220 excess deaths in 2030.

In December 2015, 197 nations agreed to hold global warming below 2ºC. Meeting this goal will require a transformation in the power sector, with polluting assets left stranded. As the most greenhouse-intensive of all the fossil fuels, coal is the most exposed to stranded asset risk.

A combination of these environmental, social, reputational and financial risks are resulting in many banks putting limits on their future lending to coal.

Paiton Power Station, Indonesia. Funded by DBS.
(Photo by CEphoto, Uwe Aranas)


It is important to distinguish between policies and statements, as Singapore’s banks and their representatives have made different comments in various forums. Below is a table of each bank’s commitments from their website or other official documentation, and statements on lending to the coal sector.


Relevant policy/commitment

Other relevant statements


DBS 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. Going forward, the bank will also cease all project financing of greenfield thermal coal mines.

DBS Chairman, Piyush Gupta, 20 June 2018: “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.”

“DBS will stop financing projects that burn low-grade coal – what is known as “dirty coal” – by the end of the year, said chief executive Piyush Gupta yesterday.” – Straits Times, 9 Feb 2018


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.


The bank’s head of group finance and chairperson of the environmental, social and governance committee, Eric Lim, told Eco-Business that, like OCBC, UOB now prohibits the financing of new subcritical coal-fired power plant projects, adding that the lender will only support power plants with a maximum carbon intensity 830g of carbon dioxide per kilowatt-hour.


The ultimate test of a policy or commitment’s merit is in its results. Market Forces has run materiality analysis on all three banks’ commitments to test their strength. We have determined what, if any, impact the policy would have had on the last five years of lending to the coal sector.

The “subcritical” standard: The common theme among Singapore bank commitments and statements is the avoidance of subcritical coal in future. We have used this mark to assess each policy, adding OCBC’s commitment to avoid lignite (brown coal) finance in future. This has not been possible in relation to DBS’ comments regarding “dirty coal”, as this phrase has many permutations (e.g. relating to sulphur, ash, mercury, CO2 intensity etc) and Mr Gupta did not clarify what was meant by his use of the phrase.


As DBS was not a lender to greenfield coal power stations in developed countries or greenfield coal mines globally, our assessment of their commitment is that it is immaterial. However, if we consider Mr Gupta’s comments regarding the exclusion of subcritical coal, this would have prevented 17% of the bank’s coal power lending from 2012-2017.


Of the US$771 millon OCBC loaned to coal power stations since 2012, only 4% (US$31 million) was lending to new plants using subcritical technology. In other words, had OCBC introduced the policy five years ago, it would have only affected 4% of their coal power lending since then.

It was recently reported that the sponsors of two Australian coal-fired power stations, Bluewaters (subcritical) and Millmerran (supercritical), were in discussions with lenders to refinance existing debt. OCBC is a lender to both and it appears unlikely the policy rule will rule them out of continued involvement.


UOB’s coal sector lending from 2012-2017 did not include subcritical coal power stations and therefore, when applied retrospectively, the policy would have had zero impact on the bank’s lending.

Vung Ang 1 power station, Vietnam. DBS is a co-funder of the 1,200MW Vung Ang 2 expansion.


Using publicly available data on DBS, OCBC and UOB’s participation in syndicates for upcoming coal deals, Market Forces is unable to identify a single project that any of the banks would now be required to withdraw from as a result of their commitments.

OCBC is exposed to the Bluewaters power station in Western Australia. This project is subcritical, and due to be refinanced shortly but whether this would constitute “new” corporate or project financing by OCBC’s definition is unclear.

In lieu of project-specific data that indicates whether the banks’ commitments involve a change of direction, Market Forces has analysed the global coal power plant pipeline to ascertain the potential impact of the commitments.

Subcritical coal plants represent 19% of the global pipeline for coal-fired power plants, according to CoalSwarm’s Global Coal Plant Tracker. Meanwhile, lignite represents 12% of global thermal coal consumption (IEA, Coal Information 2017).

In several ASEAN markets where Singapore’s banks are active and a massive coal power plant pipeline is proposed, Indonesia and Vietnam, subcritical projects comprise 59% and 18% of the pipeline by capacity, respectively.

However, it would be fallacious to ascribe the impact of the banks’ commitments to the full 19% of prospective coal power plants that are subcritical, or 59% of Indonesia’s coal power plant pipeline. The actual impact will be somewhere between zero and these maximum percentages and several factors suggest the need to heavily discount the potential impact. These include:

  • The high improbability that Singapore’s banks would currently be among the lenders for every single prospective coal power plant, whether that is in Indonesia, Vietnam or the world over.
  • The likelihood that subcritical power plants are less likely to receive broader financial support in future (see comparison section) due to other lenders moving away from the most polluting coal technologies.
  • Indonesia’s current electricity development plan, the RUPTL, identifies 7,445 MW of new coal power capacity as “strategic”. Only 13% of this capacity is identified as subcritical.
  • Further to Indonesia, 35% of coal power stations under construction in Indonesia are subcritical, suggesting fewer subcritical projects will make it through the pipeline to construction.
  • Mr Gupta’s reference to greenfield coal power plants would dramatically reduce the impact of the policies, as many proposed subcritical power plants are expansions or sited on existing sites of power plants or other industry and would therefore be considered brownfield.

Ultimately, only DBS, OCBC and UOB will be able to confirm the size and number of coal power plants that are impacted by these policies, but Market Forces is highly confident that it would fall towards the lowest end of the ranges given by the Global Coal Plant Tracker.


Between Indonesia and Vietnam, only one 600 MW power plant, the BlackGold Indragiri Hulu power station would use lignite. OCBC is not currently named as among the syndicate of banks involved in this project. We would therefore consider the impact of commitments related to lignite or brown coal as negligible at best.


A feature of several banks’ policies is an emissions intensity threshold: a limit to the amount of CO2 that can be emitted per unit of energy generated. Only UOB has stated an emissions intensity threshold of 830 grams of CO2/kWh.

DBS and OCBC have not stated an emissions intensity threshold but as they talk of restricting lending to subcritical coal power stations, which the OECD sector understanding lists as 850 grams of CO2/kWh and above, we can compare these with other banks that are active in South East Asian markets.

As the table below demonstrates, UOB matches the weakest threshold set to date, while OCBC and DBS’ equivalent thresholds are weaker than all those that have been listed.

Bank commitments that exclude projects based on technology type/CO2 emissions


Emissions threshold


830 g CO2/kWh

Standard Chartered

830 g CO2/kWh (This policy is in the process of revision)


Only funding power stations in Vietnam, Indonesia and Bangladesh with emissions below 810 g CO2/kWh


800 g CO2/kWh


Ultrasupercritical (below 750 g CO2/kWh, based on the OECD Sector Understanding on Export Credits on Coal-Fired Power Generation Projects, part of the OECD Arrangement on Officially Supported Export Credits)

Recent policies and commitments from banks operating in Asia include carve-outs for coal power in countries where there are major pipelines of proposed projects. HSBC, for instance, has ruled out funding new coal power plants anywhere in the world, except Vietnam, Indonesia and Bangladesh. This has been widely criticised.

“Too poor, too foreign, let them breathe sulfur dioxide and smog,” the policy might as well read. “They’re only Vietnamese”, remarked Ngui Thi Khanh, 2018 Goldman Environment Award Winner, regarding the discriminatory nature of HSBC’s recent policy update.

The commitments of Singapore’s banks and others operating in the ASEAN region are far less comprehensive than those from banks in north America and Europe. For example, Societe Generale committed in late 2016 it would “no longer finance the coal-fuelled power plants or related infrastructure anywhere in the world”.

Insurance companies have also been reducing or excluding their support for the coal sector. In July 2018 SwissRe committed to no longer provide insurance for coal power stations, thermal coal mines or companies that derive more than 30% of their revenue from thermal coal.


The staggered, inconsistent manner in which these policies have been delivered makes analysis and comparison challenging. But even a cursory check shows that the impact of these commitments is likely to be minimal.

Market Forces Executive Director Julien Vincent has made the following comments in relation to Singaporean banks’ coal commitments and statements:

“The purpose of policy is to set direction for the future, not reflect the status quo”.

“We can measure whether a policy is effective through what it changes, but the lack of clarity and disclosure from OCBC, DBS and UOB regarding their future coal lending means there is no tangible change to their future lending activity that we can identify.

“It’s an important reflection of the increasing expectations on banks to invest in line with a safe climate future that OCBC has offered a public position on coal. Now we just need to know whether it moves the dial a little, a lot, or not at all.”


Singapore’s banks also cite the Equator Principles and, although they are not signatories to the voluntary principles, claim they reference them as part of Environmental, Social and Governance assessments.

Market Forces can point to several failures of currently proposed and recently financed projects to satisfy the Equator Principles, including:

  • Disclosure: EP 5 – DBS is reportedly involved in Vung Ang 2 and Nam Dinh 1, two proposed Vietnamese coal-fired power projects.  The ESIAs and information about emissions and other impacts are presently not available on Vung Ang 2 and Nam Dinh 1. Equator Principle 5 requires that assessment documentation be readily available to project-affected communities.
  • Independent Review: EP 7:  Equator Principle 7 requires that independent review of applicable assessment documentation, in order to determine if key metrics, such as consultation of project-affected communities have been conducted and that the communities have sufficient information about the impacts of the coal-fired power project to make decisions about the project. There is no evidence that OCBC or DBS conducted an independent review into the projects they have funded, such as Nghi Son 2.

It does not appear that Singapore’s banks, especially DBS and OCBC which are members of syndicates to currently proposed and recently financed coal projects, are following the Equator Principles. Referencing them on their websites without being a member or demonstrating adherence to the principles therefore appears cynical.