British financial giants plan to buy fossil fuel power plants in order to shut them down | Coal
A group of the UK’s largest financial institutions are planning to speed up the phase-out of coal-fired power in Asia by buying fossil-fuel power plants to shut them down within 15 years.
Finance firms, including lenders HSBC, Citi and BlackRock Real Assets, as well as UK insurer Prudential, are working with the Asian Development Bank on the plans, according to a Reuters report. “Promising” preliminary discussions have also taken place with Asian governments and multilateral banks.
But climate activists said HSBC’s involvement in the plan was a “cynical” attempt to distract from the bank’s ongoing investments in coal-fired power ahead of the COP’s climate talks. .
Adam McGibbon, a Market Forces campaigner who calls on financial institutions to use their wealth to protect the environment, said HSBC participated earlier this year in a $ 400million (£ 290million) loan to Indonesian coal company Adaro Energy, which produced 54 million tonnes. of coal in 2020.
McGibbon said the new investor-led initiative “would only make sense if HSBC committed to stop funding the expansion of the fossil fuel industry and phase out its fossil fuel funding in line with the goals of the Paris Agreement “.
“Otherwise, it’s just HSBC trying to make money on both sides of the climate catastrophe,” he said.
Coal-fired electricity is a major contributor to the climate crisis and accounts for around one-fifth of global greenhouse gas emissions. Alok Sharma, a former British business secretary and now president-elect of Cop26, said he would make it a “personal priority” to put coal into history.
The consortium hopes to have a model ready for the UN’s Cop26 climate conference, to be held in Glasgow in November.
Donald Kanak, president of insurance growth markets at Prudential, who allegedly conceived the idea, told Reuters: “If you can find an orderly way to replace these factories sooner and take them out sooner, but not overnight, it opens up a more path, a massively larger space for renewable energies.
He said the framework had already been presented to finance ministers of the Association of Southeast Asian Nations, the European Commission and European development officials.
An HSBC spokesperson was not immediately available for comment.