Nedbank officially Cuts Ties With Coal
In January 2019, Nedbank announced their clean break away from financing coal-fired power plans by committing to not finance Thabametsi and Khanyisa, which form part of South Africa’s first round of Coal Baseload Independent Power Producer Programme.
This announcement followed a 2018 declaration that the bank will no longer provide project financing for coal fired power stations excluding the Coal IPP’s which they had committed to.
The Coal IPPS have been embroiled in multiple long-standing legal challenges that have delayed financial sign-off and culminated in the expiry of varying proposals by a syndicate of South African banks to finance the coal IPP’s.
It is now official that Nedbank has ‘undertaken not to provide project financing or other forms of asset-specific financing where proceeds would be used to develop new coal-fired power plants’. This is a momentous step in the right direction for South Africa makes Nedbank the first Africa based bank to use their financial might to cut ties with coal and prioritize their expertise on helping to deliver on the transition to a low carbon economy through scaling up on renewable energy investments.
We welcome the banks intentions to ‘make change happen’ and deliver on the diversification of electricity supply. In South Africa coal accounts for 77% of electricity output. However, the country’s coal dependency has come at a heavy price, with Witbank, situated in the country’s coal belt being labelled as one of the worst places in the world for air pollution.
With the country’s slow progress in shifting to cleaner power projects in recent years, it is our hope that Nedbank's commitment accelerates the financial services sectors’ will to initiate reforms that fully exclude fossil fuels from lending and investment policies.
350Africa Welcomes Nedbank’s Clean Break Away From Coal
Following years of portraying themselves as a green bank, Nedbank has demonstrated their willingness to Make Change Happen and address climate risks by withdrawing from financing Thabametsi and Khanyisa, two proposed coal fired power plants that form part of governments Coal Independent Power Producer Program (CIPPP). This announcement follows a 2018 declaration that the bank will no longer provide project financing for coal fired power stations excluding the Coal IPP’s which they had committed to.
The Coal IPPS have been embroiled in multiple long-standing legal challenges that have delayed financial sign off and culminated in the expiry of varying proposals by a syndicate of South African banks to finance the coal IPP’s.
With reports of Standard Bank instructing the Department of Energy (DOE) that they will stop funding the construction of any new coal fired power stations in September 2018, and Nedbank's 2019 announcement, the Development Bank of Southern Africa (DBSA), ABSA and the First Rand Group have not yet been bold enough to renounce their shared commitment even though their respective mandates to finance the coal IPP’s have expired.
In a welcomed move, Nedbank is gearing up to walk their talk by prioritising future energy financing for projects in energy efficiency and renewable energy. This is a move that sees the DBSA - a state owned development finance institution, that is yet to accelerate sustainable socio-economic development, lagging behind commercial banks. It is our hope that the DBSA will soon make a clean break from coal fired power and use its financial prowess to further scale up their investments in renewable energy and climate solutions, together with breaking free from the shackles of coal fired power stations which exacerbate the climate crises.
350Africa, in collaboration with the Life After Coal campaign launched the #ThumaMinaDBSA campaign in March 2018 targeting the DBSA. Referencing president Cyril Ramaphosa’s New Dawn speech, we’re calling on the Development Bank to “lend a hand” in the fight against climate change, and commit to not funding Thabametsi. Please add your voice to the call.