The London-headquartered bank withdrew from the US$1.87 billion coal-fired power plant’s financing consortium, but eight other banks, including Singapore’s OCBC and DBS and Malaysia’s Maybank, closed the deal.
Financing closed on the US$1.87 billion, 1,200 megawatt Nghi Son 2 coal-fired power plant last week. But London-headquartered Standard Chartered Bank—which was initially part of a consortium of nine banks that includes Singapore’s Oversea-Chinese Banking Corporation (OCBC) and DBS, Malaysia’s Maybank and Japan Bank for International Cooperation—was absent from the final list of financiers.
A campaign by green groups Greenpeace and Market Forces pointed out that by financing the coal plant, StanChart was in breach of its own policy on energy and climate change. That policy rules out providing loans for coal plants above a certain emissions intensity.
The coal financing deal also goes against the Equator Principles, a framework for banks to assess the environmental and social risk of the infrastructure projects they finance, that StanChart signed in 2003.
Vietnam is well-placed for clean energy investment, but Singapore’s major banks continue to miss opportunities to fund a clean energy development pathway, instead locking in polluting coal for decades to come.
Julien Vincent, executive director, Market Forces
Standard Chartered Bank would not comment on the reason for pulling out of the deal, but confirmed that the bank is “not a lender of the Nghi Son 2 project” in an email shared with Eco-Business.
The plant, which is to be built in the northern province of Thanh Hoa, will generate twice as much carbon dioxide per unit of power as the average coal plant in Vietnam, and cause a big increase in air pollution-related deaths in the area, according to data from the journal of Environmental Science & Technology.
But banks including OCBC and DBS take the position that developing countries such as Vietnam need coal to fuel their fast-growing economies, and cannot yet rely on clean alternative energy sources. OCBC and DBS have funded 26 coal power projects in Asia worth more than US$2 billion over the last six years, according to data from Market Forces.