return icon Vietnamnet.vn

Lender attitudes shift on coal-fired ventures

A handful of international financial groups have cut their ties with coal-fired power plants – a sustainability move as investors and the public demand strong action on climate change.

1490p9 lender attitudes shift on coal fired ventures
Lender attitudes shift on coal-fired ventures, illustration photo

A few days ago, the multinational lender HSBC confirmed that it would cease lending to new coal power stations anywhere globally – a bold shift moving towards decarbonisation.

HSBC said that it had amended its policy specialising in phasing out coal support, removing the previous exemption of Vietnam, Indonesia, and Bangladesh. Experts stated that the bank’s move would affect its involvement in funding Long Phu 1, a planned coal project with estimated investment capital of about $1.87 billion in Vietnam, where it acted as global co-ordinator. The plant begun construction in 2011 in the southern province of Soc Trang.

Earlier this year, VIR also reported that the financial group went cold on continuing its activities at Vinh Tan 3 Thermal Power Plant after being appointed as financial advisor to this $2 billion project in 2014.

Vinh Tan 3 thermal power plant, which has three turbines with a total installed capacity of 1,980MW, is the largest coal-fired thermal power facility at the Vinh Tan thermal power centre in the south-central province of Binh Thuan.

HSBC’s cancellation marks the latest move by a major international lender to ease off on bankrolling fossil fuel in Asia as many banks are under pressure from environmentalists and investors to move their financing away from fossil fuels.

The Royal Bank of Scotland stated it would end financing coal by 2030 and place stricter rules on oil and gas, while in December, Standard Chartered has pulled financing for three coal-fired power plants in Southeast Asia. The bank did not name the projects but industry sources said it referred to the Vung Ang 2 and Vinh Tan 3 plants in Vietnam, and Java 9 and 10 in Indonesia, as cited by Reuters.

CLP Holdings, one of the largest investor-owned power businesses in Asia Pacific, also halted its investment in new coal-fired power plants. The group is one of the developers of domestic Vung Ang 2 and Vinh Tan 3.

Credit Suisse, the ex-lender and shareholder of Vincommerce and Novaland, said it would stop financing new coal-fired power plants as well. Last November, the Danish Energy Agency, together with the Ministry of Industry and Trade, cautioned Vietnam against building new coal-fired power plants. It believed the country needs prompt action to slash future coal demand, which could include taxation on the use of coal or limits on new coal-based power generation.

In mid-April, two Japanese megabanks, Sumitomo Mitsui Financial Group (SMFG) and Mizuho Financial Group, signalled their cancellations in lending and investing to new coal-fired power plants from May 1.

SMFG – a foreign shareholder of Vietnamese private lender Eximbank – said in a statement that the globe has been moving towards decarbonisation since the Paris climate accord and that it “would not provide financial support in principle to new coal-fired power plants,” according to The Japan Times.

The company’s move is part of its efforts to address climate change and support the global movement towards decarbonisation, including the Japanese government’s call for an 80 per cent reduction in greenhouse gas emissions by 2050.

Mizuho, on the other hand, planned to half its $2.8 billion loans to coal power projects by 2030 and then to reduce them to zero by 2050. The move illustrates a global rise in momentum towards new measures against climate change. Notwithstanding, Mizuho said it may consider offering loans to projects designed to upgrade existing coal-fired plants with higher efficiency, including with lower carbon dioxide emissions.

Previously, Mitsubishi UFJ Financial Group confirmed it would cut ties with new investments and debts to coal power plants, in principle.

Vietnam now has 14 new coal power projects which are located in eight provinces with a total capacity of 17,390MW. Seven have already faced a considerable public backlash, while one project has been delayed for eight years and the investors of two others are undetermined.

In January, 12 health and environment organisations, including the Green Innovation and Development Center, the World Wildlife Fund, and the Vietnam Sustainable Energy Alliance have called on Vietnam to scrap plans for 14 new coal plants. Vietnamese authorities are contemplating a switch from coal to gas or green energy in the next four projects. VIR

Luu Huong

Is Vietnam becoming more and more addicted to coal?

Is Vietnam becoming more and more addicted to coal?

While the world is fleeing from coal, Vietnam is becoming increasingly addicted to coal, according to Nguyen Dang Anh Thi, an energy and enviornment expert.

Vietnam reduces capacity of coal power plants

Vietnam reduces capacity of coal power plants

Vietnam will reduce the total capacity of coal-fired thermal power plants from 2020 until 2030, according to the National Steering Committee for Electricity Development.  

MORE NEWS

Experts warn Vietnamese banks of risks following US banks’ collapse

If bond issuers fall into insolvency, the price of bonds could fall to zero, creating a high risk for banks.

Hanoi to resume tourism services on West Lake

Hanoi may resume 12 tourism services on the West Lake including boat transportation, after six years of suspension.

Car imports from Thailand still hold largest market share in Vietnam

Thailand once again led the market in terms of value and the number of CBU (complete built unit) cars imported to Vietnam in February 2023.

Deputy PM holds bilateral meetings on sidelines of UN 2023 Water Conference

Deputy Prime Minister Tran Hong Ha had bilateral meetings with many foreign leaders on the sidelines of the UN 2023 Water Conference, which is taking place in New York from March 22-24.

Vietnam temporarily suspends import, circulation of 15 types of medicines

The Drug Administration of Vietnam (DAV) under the Ministry of Health (MoH) has just issued an official dispatch on suspending the import, distribution, circulation and use of 15 types of medicines produced by Arena Group S.A. of Romania.

EVN urged to negotiate with renewable energy investors to fix electricity price

The Ministry of Industry and Trade has urged the Electricity of Vietnam (EVN) and investors of transitional solar and wind plants to negotiate and agree to fix electricity prices before March 31.

Two arrested in 11kg drug transport from France to HCM City case

The Ho Chi Minh City Department of Public Security has just arrested two people involved in the case of transporting over 11 kilograms of narcotics and ecstasy from France to Tan Son Nhat International Airport, Vietnam.

VIETNAM NEWS HEADLINES MARCH 23/2023

Renowned Vietnamese artists collaborate on unique porcelain artworks

VIETNAM BUSINESS NEWS MARCH 23/2023

Dragon fruit export turnover reaches 47 million USD

Boxer beats Spainish rival to advance to World Championship’s semifinals

Vietnamese boxer Nguyen Thi Tam trounced Spanish rival Laura Fuertes 5-0 in the women's light flyweight category to advance to the semifinals of the IBA Women’s World Boxing Championships in New Delhi.

Ministry of Health warns of possible outbreaks of dangerous diseases

In its yesterday’s official dispatch to people's committees of provinces and cities on organizing the implementation of the 2023 epidemic prevention plan, the Ministry of Health warned of possible outbreaks of dangerous diseases.

Another enterprise issues bonds, real estate bonds increase in value

A real estate firm has successfully raised funds by issuing VND4.7 trillion worth of corporate bonds. Just days before, another real estate firm also successfully issued VND2.3 trillion worth of bonds.

Stock market violations to face stricter sanctions

The State Securities Commission (SSC) will review the Law on Securities and related decrees to complete the legal framework, and strengthen sanctions for violations to protect the legitimate rights and interests of investors.

Association calls for pilot implementation of battery-powered taxis

The Hanoi Taxi Association is urging for the pilot implementation of battery-powered cabs to reduce environmental impact and stay abreast of global trends.

Vietnam strives to eliminate malaria once and for all

The Ministry of Health has announced plans to review, amend, and supplement professional guidelines to ensure nationwide implementation and assess the National Strategy for Malaria Prevention, Control, and Elimination by 2020.
back_to_top