Is Chinese bank ICBC’s coal exit a power move for a greener belt and road?

Name: Chinese cash funds African coal plants despite environmental concerns
Uploaded: 2021-06-13T10:00:00.000Z
Duration: 2 min 6 s
Description: Chinese cash funds African coal plants despite environmental concerns

ICBC chief economist Zhou Yueqiu says the bank will make a road map and timeline for the gradual withdrawal of coal financing

Observers say Beijing may be exerting pressure on financiers

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The Industrial and Commercial Bank of China will increase the balance of green loans and double renewable energy investments by 2030, compared with 2020 figures, according to the bank’s cief economist. Photo: Reuters

Jevans Nyabiage

Published: 6:00pm, 13 Jun 2021Updated: 3:11pm, 15 Jun 2021

China’s move away from fossil fuel towards renewable energy is gaining momentum after the Industrial and Commercial Bank of China (ICBC) announced it would start to phase out the financing of coal power.

Speaking at the International Financial Forum Spring Meeting in Beijing on May 29, ICBC chief economist Zhou Yueqiu said the bank would “establish a road map and timeline for the gradual withdrawal of coal financing”, an announcement observers deemed significant.

ICBC, China’s largest bank in assets and one of the world’s biggest supporters of coal, is the first major Chinese financier to commit to such a plan as Chinese lenders face intense domestic and overseas pressure.

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Chinese cash funds African coal plants despite environmental concerns

Zhou said the bank would increase the balance of green loans and double renewable energy investments by 2030, compared with 2020 figures.

He said the bank would “expand the proportion of green investment and financing and formulate a carbon-neutral plan”, Communist Party mouthpiece People’s Daily reported.

Chinese banks are facing growing pressure overseas to “green” the financing of Belt and Road Initiative projects.

For instance, in 2019 a court in Kenya ordered a halt to the construction of a US$2 billion coal-fired power plant in Lamu after activists argued the plant would endanger a Unesco World Heritage site. ICBC, which was providing US$1.2 billion of the funds, later pulled out of the deal. Similarly, South African Standard Bank, in which ICBC has a 20 per cent stake, also pulled out amid activist pressure on financiers to withdraw from the project.

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Is Chinese bank ICBC’s coal exit a power move for a greener belt and road?

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;} ICBC chief economist Zhou Yueqiu says the bank will make a road map and timeline for the gradual withdrawal of coal financing Observers say Beijing may be exerting pressure on financiers

ICBC chief economist Zhou Yueqiu says the bank will make a road map and timeline for the gradual withdrawal of coal financing

Observers say Beijing may be exerting pressure on financiers