still backing coal
DBS released a coal policy in January 2018, a first for Singaporean banks. Yet this policy fails to clearly rule out any of DBS’ loans to the coal industry since 2013 or its future backing for coal power across South East Asia.
Under its new policy, DBS has even funded Nghi Son 2, a controversial coal-fired power project that would generate twice as much CO2 per every unit of power as the average generating plant in Vietnam. (See our webpage on Nghi Son 2 here.)
In Vietnam and Indonesia alone, DBS is linked to prospective coal-fired power plants with a total capacity of 4.4 GW. These “Unlucky 4″ power plants would likely go ahead under DBS’ new coal policy.
To adhere to the Paris Agreement, respect Singapore’s call to action on climate change, and help keep global temperature rise below 2˚Celsius, DBS should not support coal-fired power projects which promote dirty fossil fuel technology in Asia.
DBS’ coal policy fails to deliver change
On 26 January 2018, DBS announced it would “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.”
DBS has clarified this statement in its ‘Approach to the Coal Sector’, stating that more efficient technologies refers to “supercritical combustion technologies or above.“
The Unlucky 4
Its policy would also allow DBS to continue supporting four prospective power stations in Vietnam and Indonesia, with a total capacity of 4.4 gigawatts.
The potential emissions from these projects has significant impact on the people of those countries, including cause harm to health and livelihoods and even cost people their lives. According to a Harvard study on premature mortality due to coal pollution, by 2030 Indonesia will have 24,400 excess deaths per year and Vietnam will have 19,220 excess deaths per year due to coal pollution.
DBS’ role in helping expand the coal power industry also impacts on our ability to keep a global temperature rise this century below 2 degrees Celsius. As stated in 2016 World Bank president Jim Yong Kim: “If Vietnam goes forward with 40GW of coal, if the entire region implements the coal-based plans right now, I think we are finished.” DBS would be contributing to this catastrophe by supporting the finance of 4.4 GW of coal-fired power capacity.
1. Van Phong 1 (1320MW)
Van Phong 1 is a 2 x 660MW coal-fired power project in Ninh Phước commune, Ninh Hòa township, Khánh Hòa province in Vietnam. Sumitomo is the sponsor of this project.
DBS has been linked to this plant as a lender and financial decisions about this project are expected in March 2019.
For further information, see our webpage on Van Phong 1 here.
2. Vung Ang 2 (1200MW)
This Vietnamese power station located in the Kỳ Lợi commune, Kỳ Anh district, Hà Tĩnh province, Vietnam, is sponsored by One Energy Ventures (a 50:50 joint venture between Hong Kong-based CLP Holdings and Diamond Generating Asia (DGA), a subsidiary of Japan’s Mitsubishi Corp) and Refrigeration Electrical Engineering Corp (REEC). The technology type of this project may have been changed to ultrasupercritical.
DBS has been linked to this plant as a lender. See our webpage on Vung Ang 2.
3. Jawa-9 (1000MW)
This prospective Indonesian coal-fired power plant will be located in Banten province. It is anticipated that ultrasupercritical technology will be used. The sponsors are Indonesian utility, Indonesia Power (a PLN subsidiary) (51%) and Barito Pacific (49%).
DBS is linked to this plant as a financial advisor and has assisted in shortlisting 3-4 companies to act as Engineering, Procurement and Construction (EPC) contractors. Final investment decisions were anticipated for the third quarter of 2018. None had been made public as of April 2019.
4. Jawa-10 (1000MW)
This prospective Indonesian coal-fired power plant will be located in Banten Province. It is anticipated that ultrasupercritical technology will be used. The sponsors are the Indonesian utility, Indonesia Power (a PLN subsidiary) (51%) and Barito Pacific (49%).
DBS has been linked to this plant as a financial advisor and has assisted in short listing three or four companies to act as EPC contractors. Final investment decisions are anticipated to be made in 2019.
DBS said it would stop funding dirty #coal power plants, but that's exactly what they're trying to do in Indonesia with the polluting and unnecessary Java 9 and 10 project. Tell @dbsbank : stop funding dirty coal! https://t.co/2quDK2dSqJ pic.twitter.com/gv3PSvAx3r— Market Forces (@market_forces) April 8, 2019
Proud to be one of 50 organisations who published an ad in the @FT today calling on @AbeShinzo to demonstrate true climate leadership and end Japanese financing for coal. See our ad and check out https://t.co/AsrurW5NIf #NoCoalJapan pic.twitter.com/XzxgmJXo5w— Market Forces (@market_forces) April 18, 2019
What should DBS do?
DBS should withdraw from the “Unlucky 4” coal power stations listed above. Continuing to support these dirty projects risks its commitment to keeping global temperature rise below 2C.
DBS should also revisit its coal policy in order to:
- exclude all financial support for all coal-fired power stations
- exclude all financial support to coal mines.