ZIMBABWE’S economic recovery ambitions were dealt another blow after China’s largest bank pulled out of plans to finance a $3bn coal-fired power plant in the country, according to a report by Bloomberg News.
Industrial and Commercial Bank of China told Go Clean ICBC, described by Bloomberg as an ad-hoc body representing 32 environmental groups, that it won’t fund the 2,800MW Sengwa coal project in northern Zimbabwe.
“This is highly significant, obviously for Zimbabwe but also for Chinese overseas energy financing,” Lauri Myllyvirta, lead analyst for the Centre for Research on Energy and Clean Air told the newswire. “It is the first time, to my knowledge, that a Chinese bank has pro-actively walked away from a coal-power project.”
Earlier this month, Bloomberg News reported that David Brown, CEO of Kuvimba Mining House, a company set up by the Zimbabwean government to re-develop gold mines and build a new platinum group metals mine, was to resign.
The Sengwa project was being developed by RioEnergy, a unit of RioZim.
Western and South African banks have come under increasing pressure from their shareholders not to fund developments that could contribute to climate change, leaving Chinese lenders as one of the last avenues to secure finance, said Bloomberg News.
That door may now be closing, should China plan to improve its own environment credentials.
ICBC’s withdrawal marks the second time the bank’s coal-funding plans have been scrapped. A permit to build a coal-fired plant in Lamu in Kenya was canceled by the government last year, the newswire said.
