MOST of the world’s development banks had committed to ending finance for coal-fired power plants, said Reuters citing research produced by Boston University’s Global Development Policy Center.
A pledge by the G20 nations at the COP26 climate conference in Glasgow on Sunday to stop funding overseas coal-fired power plants means that 99% of all development finance institutions are committed to cutting coal investment and raising support for renewables, according to the research.
“If these institutions live up to their commitments, it will be easier for developing countries to find official finance for renewable energy and coal power phase-out than for building new coal-fired power plants,” Reuters quoted Rebecca Ray, a senior researcher at the GDP Center and one of the study’s authors, as saying.
The study said only three major “holdouts” remain – the Development Bank of Latin America, the Islamic Development Bank and the New Development Bank – though many of the major shareholders in those institutions were part of the G20 pledge.
The G20 pledge follows a similar commitment made by Chinese President Xi Jinping to the United Nations General Assembly in September.
The decision appears to have had an immediate effect on the country’s financial institutions, with the Bank of China vowing to end new overseas coal mining and power projects starting in October, said Reuters.
One expert involved in drawing up guidelines to decarbonise China’s Belt and Road investments said Chinese financial institutions were aware of the waning demand for coal-fired power, making it easier for Xi’s order to be implemented.
“They are quite serious about it,” said the expert, who did not want to be named because of the sensitivity of the matter. “They are not looking for excuses to continue the projects; they are looking for reasons not to continue.”