Skip to main content

'Climate destruction': Top Asian banks, three from India, keep doors open to finance coal

 new report released by a top Netherlands-based advocacy group, BankTrack, has said that of the nine major Asian banks which “are open for business in coal, dirtiest of fossil fuel” three are from India: State Bank of India, Axis Bank and Bank of Baroda. Other major Asian banks in the business of coal are Mizuho, SMBC and MUFG in Japan, and Bank Mandiri, Rakyat and Negara in Indonesia.
Titled “Coal Havens: The policy loopholes keeping coal finance alive in Asia”, the report underlines, Asia today is the ‘growth engine’ of the global coal industry despite the world agreeing to transition away from fossil fuels at COP28 in December 2023. To prove its point, the report cites the International Energy Agency (IEA), which say, global coal demand reached a record high in 2022 amidst the global energy crisis, rising by 4% year-on-year to 8.42 billion tonnes (Bt).
According to IEA, “The growth engine for coal demand, which increased in both power and non-power sectors, was once again Asia. In China, demand rose by 4.6%, or 200 million tonnes (Mt). In India, it increased by 9%, or 97 Mt; and in Indonesia, where nickel smelters became a significant source of demand growth, it shot up by 32%, or 49 Mt”.
The BankTrack report asserts, all this is happening because “most of Asia’s major banks have either very weak or non-existent exclusions of coal from their investment portfolios, leaving the door open to continued investment in climate destruction.”
The report seeks to draw attention to the fact that the coal financiers are resisting the energy transition in some of the largest hotspots for coal expansion in the world, with a focus on Indonesia, the Philippines, South Korea, Singapore and India. “Although China dwarfs the rest of the world in terms of coal power financing and generation capacity in the pipeline, these countries in South, East and Southeast Asia are the most notable areas of coal power outside that”, it says.
According to the report, China accounts for 59% of Asian coal financing, with most of the remaining expansion taking place elsewhere in Asia, including 16% in South Asia (India, Pakistan, and Bangladesh), 11% in Southeast Asia (Vietnam, Philippines, Indonesia, Cambodia), and 9% in east Asia (Japan and South Korea). “Coal provides about half of all power generated in the region”, it adds.
Quoting the International Energy Agency (IEA) forecasts, report says, coal power usage up to 2025 will grow more in Southeast Asia (14%) than in India (7%) or China (5%). It describes Indonesia and Vietnam as places where coal dependency is high and transitions are likely to be challenging.
“National policies on coal are hugely important in shifting coal markets in Asia, where state ownership of banks and coal developers is relatively high”, it says, offering the example of India in this context:  “Captive coal is increasingly being represented among the coal plants that are clearing bureaucratic hurdles in India.” 
While in 2022 no new non-captive coal plants received environmental clearance in India, JSW Steel’s “fiercely opposed” Utkal steel plant captive coal power (Odisha) facility received environmental clearance in 2022, as also the Bodal captive plant in Gujarat, and the Malibrahmani captive plant in Odisha, which is projected to provide power to a steel plant in Angul, Odisha. .
Quoting the Toxic Bonds Network, which collects data on USD and euro-denominated bonds, the report says, “Coal developers across South Korea, Indonesia, India and China have relied on banks to underwrite their bond issuances to raise capital for their coal empires.”
“In India, the Adani Group has 15 bonds worth USD $7.8bn outstanding, and has relied on its most loyal financiers of Barclays and Standard Chartered to continue underwriting those issuances, propping up the company’s vast and corrupt coal infrastructure”, the report claims.
In India, only two of 34 banks have exclusion policy that prohibits lending for creating new capacities for coal-based energy
Pointing out that India’s Power Finance Corporation “has 10 bonds outstanding worth USD $4.5bn”, the report says, “Financing for thermal coal from 2005 to August 2023 came from large domestic entities like the Power Finance Corporation (USD $31bn), Rural Electrification Corporation (USD $19bn), and the State Bank of India (USD $9bn).”
According to the report, the level of financing by domestic financiers “dwarfed that of even the most active international lenders in Indian coal”. Thus, the top three international lenders (JBIC, or Japan’s export credit agency, China Development Bank and Standard Chartered) provided USD $2bn combined. In fact, seven-and-a-half times more finance was “provided collectively by domestic financiers (USD $86bn) for thermal coal, compared to international lenders (USD $6.5bn)”, it nots.
“Meanwhile”, the report claims, “International lenders like Barclays, Standard Chartered, Citi, Bank of America and DBS, as well as the Japanese megabanks SMBC, MUFG and Mizuho still support India’s coal baron, Adani. Barclays is a particularly steadfast supporter of the Adani Group, in spite of its financial turmoil and controversy – a relationship that should end for the sake of people and planet.”
“A notable point in the cases of Indonesia and India is that the domestic financiers are almost all state-owned, and therefore a significant driver of dependence on coal is national energy policy including subsidies and energy tariffs”, asserts the report.
In an analysis of the banks that finance coal fired power plants, the report says, “Axis Bank as having no coal policy”; Bank of Baroda’s “Business Responsibility and Sustainable Development Manual” does not mention coal. Same is the situation with regard to the Union Bank of India’s sustainability policy, Punjab and Sind Bank, and Bank of India. As for India’s Export-Import Bank it “provided USD $310m for the refurbishment of Hwange power station in Zimbabwe.”
In fact, states the report, in India, “Only two of the 34 banks (Federal Bank and Survoday Small Finance Bank) have an exclusion policy that prohibits lending for the construction of new coal power plants or the extension of an existing coal power plant.” Additionally, it underlines, “Federal Bank has also committed to not finance oil and gas exploration activities, putting it at the top of the table on that criterion.”

Comments

TRENDING

Irrational? Basis for fear among Hindus about being 'swamped' by Muslims

I was amused while reading an article titled "Ham Paanch, Hamare Pachees", shared on Facebook, by well-known policy analyst Mohan Guruswamy, an alumnus of the John F. Kennedy School of Government, Harvard University, and the Graduate School of Business, Stanford University. Guruswamy, who has also worked as an advisor to the Finance Minister with the rank of Secretary to the Government of India, seeks to probe, as he himself states, "the supposed Muslim attitude to family planning"—a theme that was invoked by Narendra Modi as Gujarat Chief Minister ahead of the December 2002 assembly polls.

Why's Australian crackdown rattling Indian students? Whopping 25% fake visa applications

This is what happened several months ago. A teenager living in the housing society where I reside was sent to Australia to study at a university in Sydney with much fanfare. The parents, whom I often met as part of a group, would tell us how easily the boy got his admission with the help of "some well-meaning friends," adding that they had obtained an education loan to ensure he could study at a graduate school.

Tracking a lost link: Soviet-era legacy of Gujarati translator Atul Sawani

The other day, I received a message from a well-known activist, Raju Dipti, who runs an NGO called Jeevan Teerth in Koba village, near Gujarat’s capital, Gandhinagar. He was seeking the contact information of Atul Sawani, a translator of Russian books—mainly political and economic—into Gujarati for Progress Publishers during the Soviet era. He wanted to collect and hand over scanned soft copies, or if possible, hard copies, of Soviet books translated into Gujarati to Arvind Gupta, who currently lives in Pune and is undertaking the herculean task of collecting and making public soft copies of Soviet books that are no longer available in the market, both in English and Indian languages.

Gujarat slips in India Justice Report 2025: From model state to mid-table performer

Overall ranking in IJR reports The latest India Justice Report (IJR), prepared by legal experts with the backing of several civil society organisations and aimed at ranking the capacity of states to deliver justice, has found Gujarat—considered by India's rulers as a model state for others to follow—slipping to the 11th position from fourth in 2022.

Punishing senior citizens? Flipkart, Shopsy stop Cash on Delivery in Ahmedabad!

The other day, someone close to me attempted to order some goodies on Flipkart and its subsidiary Shopsy. After preparing a long list of items, this person, as usual, opted for the Cash on Delivery (popularly known as COD) option, as this senior citizen isn't very familiar with online prepaid payment methods like UPI, credit or debit cards, or online bank transfers through websites. In fact, she is hesitant to make online payments, fearing, "I may make a mistake," she explained, adding, "I read a lot about online frauds, so I always choose COD as it's safe. I have no knowledge of how to prepay online."

A conman, a demolition man: How 'prominent' scribes are defending Pritish Nandy

How to defend Pritish Nandy? That’s the big question some of his so-called fans seem to ponder, especially amidst sharp criticism of his alleged insensitivity during his journalistic career. One such incident involved the theft and publication of the birth certificate of Masaba Gupta, daughter of actor Neena Gupta, in the Illustrated Weekly of India, which Nandy was editing at the time. He reportedly did this to uncover the identity of Masaba’s father.

Of lingering shadow of Haren Pandya's murder during Modi's Gujarat days

Sunita Williams’ return to Earth has, ironically, reopened an old wound: the mysterious murder of her first cousin, the popular BJP leader Haren Pandya, in 2003. Initially a supporter of Narendra Modi, Haren turned against him, not sparing any opportunity to do things that would embarrass Modi. Social media and some online news portals, including The Wire , are abuzz with how Modi’s recent invitation to Sunita to visit India comes against the backdrop of how he, as Gujarat’s chief minister, didn’t care to offer any official protocol support during her 2007 visit to Gujarat.  

Area set aside in Ahmedabad for PM's affordable housing scheme 'has gone to big builders'

Following my article on affordable housing in Counterview, which quoted a top real estate consultant, I was informed that affordable housing—a scheme introduced by Prime Minister Narendra Modi—has deviated from its original intent. A former senior bureaucrat, whom I used to meet during my Sachivalaya days, told me that an entire area in Ahmedabad, designated for the scheme, has been used to construct costly houses instead. 

Just 5% Gujarat Dalit households 'recognise' social reformers who inspired Ambedkar

An interesting survey conducted across 22 districts and 32 villages in Gujarat sheds light on the representation of key social reformers in Dalit households. It suggests that while Dr. B.R. Ambedkar's photo was displayed in a majority of homes, images of Lord Buddha and the 19th-century reformist couple, Savitribai Phule and Jyotiba Phule, were not as commonly represented.