Our Approach to Financing New Coal-Fired Power Plants
In February 2018, we issued a statement on our approach towards financing coal-fired power plants (“CFPP”) and thermal coal mining. We have since been monitoring market developments and have also had regular dialogue with stakeholders about the role DBS should play in supporting sustainable development.
Specifically, we noted the World Energy Outlook 2018, released in November 2018 by the International Energy Agency (“IEA”), which outlines a Sustainable Development Scenario (“SDS”) for energy. We also studied the Intergovernmental Panel on Climate Change (“IPCC”) SR15 when it came out in October 2018.
Both reports are unequivocal in the need to urgently tackle climate change.
However, the reports also confirmed that in some parts of Asia, there will need to be a transition period. This is reflected in the forecast coal fired power capacities in the IEA report and the comment in SR15 that in most 1.5-degree consistent pathways, investments in unabated coal generation is projected to halt only by 2030.
Given these considerations, we have decided to cease financing new CFPP in any market regardless of the efficiency of technologies used, after honouring our existing commitments. The last of these existing commitments is likely to be completed by 2021. This aligns our financing policy for CFPP with a trajectory that is more ambitious than the SDS and the pathways described in IPCC SR15.
We continue to pursue renewable projects. In 2018, we had 17 such deals mandated or closed with estimated loan size of over SGD 1.3 billion.
IPCC, 2018: Global warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. Section 2.5.2.