More than 100 financial institutions have quit coal since February.
Asia’s coal developers and coal-fired power plants are struggling to build new markets and keep afloat as global financial institutions turn their backs on them to avoid criticism over climate change, Reuters reports.
“Coal power plant financing is very challenging,” said Dharma Djojonegoro, Deputy Chief Executive Officer of Indonesia’s PT Adaro Power, the power generation unit of the country’s second-largest coal miner PT Adaro Energy.
“European banks have said they don’t want to finance coal projects for a while, Japanese followed and now Singapore. About 85% of the market now don’t want to finance coal power plants,” he said.
More than 100 major financial institutions have divested from thermal coal projects by February, along with more than 20 significant insurers, according to the Institute of Energy Economics and Financial Analysis.
The lack of funding may delay plants in other markets where thermal coal demand is expected to grow, including India and Vietnam, which are depending on low-cost coal-fired power to support their developing manufacturing sectors.
“Certainly for the coal-fired power sector it’s already clear there is no investment coming from European banks, US banks, or Australian banks,” said Sacha Winzenried, a partner with PricewaterhouseCoopers in Jakarta.
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