Out-Law News | 23 Aug 2021 | 3:28 am | 1 min. read
Financial firms are reported to be working together to buy and close coal-fired power plants across Asia in a bid to help industry meet climate targets.
According to UK broadcaster the BBC, the plan was developed by British insurer Prudential and involves the Asian Development Bank (ADB) which is hoping the plan can be ready for the COP26 climate conference in November. Other firms involved include Citi and HSBC banks.
The plan aims to build up public-private partnerships (PPPs) to buy the power plants and shut them down within 15 years to allow countries to switch to renewable energies, a Reuters report said.
It has been reported that the plan aims to raise the money to buy the assets at well below the normal cost by giving lower than usual returns to investors. It has already been submitted to finance ministers of the Association of Southeast Asian Nations (ASEAN), the European Commission and European development officials.
Details to be finalised include ways to encourage coal plant owners to sell, how to deal with the plants when they are retired, any restoration requirements, and possible role of carbon credits.
Some ASEAN countries have already set out their net zero emissions timelines. Thailand recently announced its plan to replace coal-fired plants with gas-fired ones. Indonesia in August announced its goal to achieve net zero emission in 2060 and is planning to make sure all power plants producing energy only from renewable energies by then.
This plan reflects wider industry efforts to phase out coal. The Industrial and Commercial Bank of China (ICBC) and Asian Infrastructure Investment Bank (AIIB) have each indicated they will no longer support coal. In July, ICBC dropped plans to fund a $3 billion coal-fired power plant in Zimbabwe.