DBS to stop funding ‘dirty-coal’ projects by year end
The DBS bank will stop financing ‘dirty-coal’ or low-grade coal projects by the end of this year, but continue to support ventures in emerging markets that uses higher-quality coal, a top bank official has said. The Singapore-headquartered bank, which is rated among the largest in Asia, will also focus on funding renewable energy projects, Chief Executive Piyush Gupta said.
At a DBS financial results briefing, he said that the bank will stop financing projects that burn low-grade coal, also known as “dirty coal”, by the end of the year.But, he was quick to assure that the DBS will continue to lend to projects in emerging markets that burn “higher quality” coal, at the same time start developing a portfolio of renewable energy projects to shift the mix of its loans.
“In respect of coal, we start with one caveat: We have got to remember that the bulk of energy needs in our part of the world are from coal,” he said.
Citing global energy reports on coal, according to which by 2040 it would still account for about 40 per cent of the power generation mix, he said, “It is important to understand that you can’t turn this off.”
“It’s not that straightforward an outcome, for either society or the environment. So you’ve got to be thoughtful about how we transition,” Gupta was quoted as saying by the Straits Times.
DBS has still struck a few deals linked to burning such “low-grade” coal this year, and will not pull out of these loans due to pre-commitment.
A report, last month, by Australian environmental advocacy group ‘Market Forces’ said Singapore banks DBS, OCBC and UOB have financed 21 coal project deals since 2012 worth USD 2.29 billion. Of these, more than half were for coal-fired power plants that are mostly in Indonesia and Vietnam.