Bank of China pledges to end funding for foreign coal mining and power plants
- Lender is the first state-owned commercial bank to make such a pledge after recent Xi Jinping speech to UN
- Chinese president promised country would stop building overseas coal-fired plants
The Bank of China has said it will no longer provide financing for new coal mining and coal-fired power projects overseas from next month.
It is the first of the four Chinese state-owned commercial banks to make such a commitment after President Xi Jinping told the United Nations General Assembly this week that China would stop building coal-fired power plants abroad.
It said in a statement that it had recently drawn up an action plan to help China meet its target of reaching peak carbon emissions by 2030 and achieving carbon neutrality by 2060.
It will also reduce lending to high-emission industries and increase its credit support for green technologies, including those designed to reduce emissions.
The Chinese authorities have yet to clarify whether Xi’s latest pledge would include the financing as well as the construction of coal-fired projects, nor whether it applies to the private sector.
“If Xi’s pledge includes China’s commercial banks too, this is more ambitious than anything the West has done,” Kevin Gallagher, director of the Boston University Global Development Policy Centre, posted on Twitter.
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Some of the projects that had been at the planning stage were later shelved or deferred, including plants in Egypt and Pakistan.
China’s investment in overseas coal-fired power projects has dropped sharply in recent years and it did not finance or invest in any coal projects in Belt and Road Initiative countries in the first half of 2021.
Some state-owned and commercial banks have also expressed a willingness to phase down or end support for overseas coal projects.
Liu Guiping, deputy governor of the People’s Bank of China, told a press conference in April that China would implement green investment principles for the Belt and Road Initiative and strictly supervise overseas investment in new coal power projects.
Zhou Yueqiu, chief economist of the Industrial and Commercial Bank of China, said in May that the bank would draw up a timetable for the gradual withdrawal of coal financing.