Nedbank is moving on coal power, but two plants are stuck on its radar
The South African bank is the first from the Global South to move out of new coal plants, but is still backing Thabametsi and Khanyisa
By: Robyn Hugo – Centre for Environmental Rights & Yann Louvel – BankTrack
Apr 10 2018
The 2017 Sustainability Report of Nedbank, one of South Africa’s biggest banks, contains an important new commitment from the bank, effective as of 2018, ‘not to provide project financing (…) to develop a new coal-fired power plant, regardless of country or technology.’ This undertaking makes Nedbank the first commercial bank from the global South to have moved away from coal power financing, and sees the bank join the ranks of 15 western banks which have to date adopted similar policies since October.
However, accompanying this welcome step from Nedbank is a concerning – and familiar – caveat.
The Cape Town-based Centre for Environmental Rights (CER) was alerted to Nedbank’s new approach to coal power finance via communication with Nedbank officials concerning two proposed South African coal plants which the bank is currently considering for finance: the Thabametsi and Khanyisa projects, part of the national ‘Coal Baseload Independent Power Producer Procurement Programme’ which CER continues to contest in court. Objections have also been lodged with the South African Energy Regulator against the granting of generation licences for both plants.
Nedbank’s new position, in full, states as follows:
‘In addition, as from 2018, excluding its existing commitments* to round 1 of [South Africa’s] coal baseload procurement programme, the bank has undertaken not to provide project financing or other forms of asset-specific financing where the proceeds will be used to develop a new coal-fired power plant, regardless of country or technology.’
These ‘existing commitments’ refer to Thabametsi and Khanyisa, which, the bank advised, are ‘currently being assessed on their fundamentals and must be in compliance with our Social and Environmental Management System, which aligns with all relevant legislation, regulation and best-practice principles.’