Who Funds Overseas Coal Plants? The Need for Transparency and Accountability
"Who Funds Overseas Coal Plants? The Need for Transparency and Accountability", July 2021
This policy brief aims to correct this knowledge gap and compares China’s overseas coal finance relative to its public and commercial counterparts globally.
Three key takeaways are:
- China is the largest public financier of overseas coal plants: The Export-Import Bank of China and the China Development Bank accounted for US$15.6 billion, or 50 percent of global public finance commitments in overseas coal fired power plants that reached financial closure between 2013 and 2018, or 40 percent by generation capacity.
- But 87 percent of total (public and private) finance for overseas coal plants is funded by entities outside China: Altogether, Chinese public and commercial entities (which include policy banks, state and privately-owned commercial banks and firms) financed 32 GW of overseas capacity, accounting for just 13 percent of the coal power capacity outside China that is operational or under development between 2013 and mid-2019 (17 percent of the total overall newly added coal fired power generation capacity outside China during the period, and roughly 11 percent of the power generation capacity under construction or planning outside China).
- Clear and official estimates of non-Chinese international coal funding by the sources of finance are currently lacking: According to independent research, Japanese and Western institutional investors and commercial banks are major financiers of international coal power abroad. While many of these commercial institutions have recently made ambitious climate commitments, better data disclosure on climate-related finance is needed for accountability and policy coordination.
In addition to agreeing to phase out public and private overseas coal financing, the G20 should work to formalize global disclosure and transparency so the global community can properly track, monitor and hold public and private actors accountable to new commitments. They should also work to advance policy frameworks that ensure no worker, entrepreneur or community is left behind by coordinated financing phase outs of coal and subsequent fossil fuels.