DBS released a coal policy in January 2018, a first for Singaporean banks. However, the policy does not clearly rule out any of the loans that DBS has provided to the coal industry since 2013, and fails to rule out future involvement in coal power in South East Asia.
In fact, under their new policy, DBS funded Nghi Son 2, a controversial coal-fired power project which would generate twice as much CO2 per every unit of power generated as the average generating plant in Vietnam. For further information, see our page on Nghi Son 2 here.
In Vietnam and Indonesia alone, DBS is linked to prospective coal-fired power plants with a total capacity of 3.8 GW and estimated potential emissions of over 500 million tonnes of CO2 over the plants’ lifetimes. These Unlucky 3 power plants would likely go ahead under the new coal policy.
In order to adhere to the Paris Agreement, respect Singapore’s call to action on climate change, and respond to the threat of global climate change by keeping a global temperature rise below 2˚C, DBS should not support these coal-fired power projects which promote dirty fossil fuel technology in Asia.
DBS’ Coal Policy fails to deliver change
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.
The Unlucky 3
This policy would also allow DBS to continue supporting 3 prospective power stations in Vietnam and Indonesia, with a total capacity of 3.8 gigawatts.
The potential emissions of these projects is estimated at 500 million tonnes of CO2 over the plants’ lifetimes. This 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’ involvement in expanding the coal power industry also impacts on the world’s ability to keep a global temperature rise this century below 2 degrees Celsius. As stated in 2016 by Jim Yong Kim, World Bank President, “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, in supporting the finance of 3.8 GW of coal-fired power capacity, would be contributing to this end.
CHANGE Vietnam, Documentary: Hon Cau MPA under threats from coal power (2017)
1. 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 Refigeration Electrical Engineering Corp (REEC). The technology type is unknown at this time.
DBS has been linked to this plant as a lender.
For further information, see our page on Vung Ang 2 here.
2. 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 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 Engineering, Procurement and Construction (EPC) contractors. Final investment decisions are anticipated to be made in third quarter of 2018.
3. 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 third quarter of 2018.
What should DBS do?
DBS should withdraw from the Unlucky 3 coal-fired power stations listed above. Continuing to support these projects risks its commitment to keeping global temperature rise below 2 degrees.
DBS should also revisit its coal policy in order to:
- Exclude all financial support for all coal-fired power stations, and,
- Exclude all financial support to coal mines.