Clean Coal Day in Japan 2016 International Symposium Financial Restriction on Coal Assets September 8, 2016 Tokyo Yoshihiko SAKANASHI Senior Counselor 1 Electric Power Development Co., Ltd. (J-POWER)
Key words ○ Financial/Debt Restriction ○ Governmental Finance, Private Indirect Finance ○ Asset Evaluation and Disclosure Rules ○ Communication 2
Restriction by Multilateral Development Banks “The President’s Climate Action Plan” (June 2013) 1. Cut carbon 2. Prepare the US 3. Lead international efforts to combat pollution in the for the impacts of climate change and US climate change prepare for its impacts Putting restriction to financing of coal-fired power plants by Multilateral Development Banks • World Bank Group: Energy Sector Directions Paper (July 2013) • European Investment Bank: Evaluation guideline for fossil fuel power projects (July 2013) • European Bank for Reconstruction and Development: New Energy Strategy (Dec 2013) 3
Arguments on Export Credits Policy Strict restrictions of export credits for coal-fired power plants had been raised in March 2014. “Building high efficient coal-fired power plants “Back off from provide better solution government finance to cope with climate for those newly coal- change, since fired power plants emerging countries w/o CCS plan” need to rely on coal- fired power plants” (US, UK, etc.) (Japan, Australia, Korea) 4
OECD New Rule for Export Credits New arrangements agreed by OECD: Nov 2015 New rules taking effect: Jan 2017 The finance for high efficient coal-fired power plants, including USC, has been kept without any restriction. Maximum repayment terms Unit ≧ 300 to Unit > 500MW Unit < 300MW 500 MW USC or emissions < 12 years 12 years 12 years 750 g-CO2/kWh 10 years and only 10 years and only SC or emissions Ineligible in IDA-eligible IDA-eligible 750-850 g-CO2/kWh countries countries 10 years and only Sub-C or emissions > Ineligible Ineligible IDA-eligible 850 g-CO2/kWh countries IDA: International Development Association Source: OECD 5
Reported new policies of commercial banks Names Contents Links Royal Bank ・ Ended its lending to mining companies http://www.theguardian.com/envir onment/2016/apr/17/rbs-pulls- focusing on coal (Dec 2015) of Scotland fossil-fuel-investments-green- ・ Not finance to new tar sands projects energy (April 2016) JP Morgan ・ Prohibit finance development of greenfield https://www.jpmorganchase.com/ corporate/Corporate- coal mines Responsibility/document/jpmc- ・ Prohibit finance of new coal-fired power environmental-and-social-policy- plants in high income OECD countries framework.pdf ING ・ End financing of new coal-fired power http://www.banktrack.org/show/n ews/ing_becomes_latest_bank_to_ plants and thermal coal mines worldwide stop_finance_for_new_coal ・ Not finance new clients with business over 50% reliant on coal-fired power plants or thermal coal mines BNP ・ No longer finance coal mine activities w/o http://www.bnpparibas.com/en/ne ws/press-release/bnp-paribas- energy diversification strategy (Nov 2015) Paribas dedicates-15bn-financing- renewable-energy-and-reinforces- its-carbon-r 6
Setting right track for energy finance? ○ Evaluation of “Stranded” Asset ・ Energy Market Design ・ Energy Industry Structure of Each Country ○ Information Disclosure ・ Framework and Rule ○ Communication ・ Expertise; Finance, Environment, Energy, Technology, Security, etc. 7
Thank you very much for your attention. 8
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