* Revised lending criteria rule out regular coal plants
* Board can tighten thresholds as EU climate policy evolves
* Latest in series of moves by multilateral banks on coal
By John McGarrity
LONDON July 24 The European Investment Bank, the
EU's finance arm, said it would stop lending to most coal-fired
power stations to help the 28-nation bloc reduce pollution and
meet climate targets, a move that may put pressure on other
New and refurbished coal-fired power plants will be
ineligible for funding unless they emit less than 550 grams of
carbon dioxide per kilowatt-hour (gCO2/KWh), the EIB said on
Wednesday, a threshold that could be met either by a combined
heat and power plant or one that also burns biomass.
"The vote to introduce an emissions performance standard
represents a step-change in the EU's fight against climate
change and puts the bankers ahead of politicians in terms of
tangible action," said Ingrid Holmes, of environmental
think-tank E3G in a statement.
The EIB said it could tighten the emissions standard in the
future to ensure its lending criteria are consistent with EU
climate policy and create jobs across Europe.
Since the start of 2007, the EIB has loaned around 11
billion euros ($14.5 billion) to fossil fuel-fired plants, most
of it to gas rather than coal, a fraction of its total lending
for power of 83 billion euros.
The EIB decision follows moves by other multilateral
financial institutions such as the Washington-headquartered
World Bank to fund coal-fired power stations only in "rare
The pullback by multilateral banks comes as more private
sector lenders are already reconsidering their exposure to
"New coal power plants are no longer viewed as the low-risk,
low-cost option for electricity, so we would expect that private
finance for coal will stop flowing," said Athena
Ronquillo-Ballesteros of Washington-based think tank the World
Resources Institute (WRI).
U.S. President Barack Obama said earlier this month his
administration would impose tougher standards on coal-fired
power stations at home and urged multilateral lenders to curb
finance to the sector abroad, except for the poorest countries.
A report published by pressure group Bankwatch last year
listed Barclays, Deutsche Bank, Royal Bank
of Scotland, BNP Paribas and Credit Suisse as
the main European private sector lenders to the coal mines,
transport and power stations between 2005 and 2011.
In an answer to emailed questions from Reuters, RBS said its
lending to the power sector was "continually under review" and
that as of end-2012 its total lending to coal-related assets was
1.2 billion pounds, or 0.2 percent of its total lending.
In the United States, JP Morgan Chase, Citigroup
, Bank of America and Morgan Stanley were
the main financiers for projects that mine and burn the fossil
fuel, according to the WRI report. Bank of China, Industrial and
Commercial Bank of China and China Construction Bank have been
the main private-sector Asian lenders to coal.
Some observers have questioned whether private and
state-backed lenders in Asia and the Middle East will cut
investments in coal, given the high returns that mines and power
plants could yield in power-hungry developing countries and the
earnings at stake for suppliers of coal-related technology.
In the past year, Abu Dhabi state-owned energy company TAQA
signed a $12 billion deal with Turkey to mine and generate power
from lignite, the dirtiest form of coal, while the China
Development Bank agreed to lend Ukraine around $3.6 billion to
develop the gasification of coal, a technology deemed to be
Although China and India are expected to record the biggest
growth in energy demand in the coming decades, other large
developing nations are likely to build hundreds of new
coal-fired power stations in order to fuel economic growth,
according to WRI.
Last year the International Energy Agency said coal could
overtake oil as the world's primary energy source, making it
even more difficult to slow the pace of long-term climate