JBIC muddies comments from chief on ending coal finance

TOKYO (Reuters) - Japan’s government-owned export credit agency said it has not changed its policy on financing coal power plants, muddying a message from the bank’s head that environmental groups had hailed as a major shift on the polluting fuel.

FILE PHOTO: The logo of Japan Bank for International Cooperation (JBIC) is seen at it's headquarters in Tokyo, Japan June 6, 2016. REUTERS/Toru Hanai

The Japan Bank for International Cooperation (JBIC), as a state-owned financing vehicle, follows government policy, a spokesman said. Japan’s government, along with JBIC, has long been criticized for backing exports of coal-power technology and equipment by environmental groups as the world moves to cut emissions to combat climate change.

In an interview with Diamond Online published last week, JBIC Governor Tadashi Maeda was quoted as saying the bank “will no longer accept loan applications for coal-fired power generation projects.”

The Japanese business publication quoted Maeda as saying that Vietnam, where the bank is considering support for the Vung Ang 2 coal-power project, must change its energy policies, explaining it takes around 10 years for the lender to make loan decisions, meaning even the most advanced technology of today “may become obsolete” in a decade.

Asked whether Maeda was quoted accurately, JBIC spokesman Ryo Nishizaki said, “What I can say on that is that we continuously follow Japanese government policy and we consider each project on a case-by-case basis based on that.”

Nishizaki declined to elaborate on the apparent discrepancy between his comment and Maeda’s reported remarks, except to reiterate the comments on how technology can become obsolete.

Mizuho Financial Group said last month it will stop financing new coal power projects and end all loans for coal by 2050.

Mizuho and Japan’s two other biggest banks - Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group - were among the world’s five biggest lenders to coal power and mining over the last five years, according to Refinitiv SDC Platinum data.

“It’s great that the banks are moving to stop financing new coal plants, but some loopholes remain and it’s still very unclear to us what JBIC’s position is,” said Hana Heineken, a senior campaigner at Rainforest Action Network in San Francisco.

“There should be no fossil-fuel expansion at all, as doing that will just shoot past Paris Agreement goals,” she said, referring to the global pact to cut emissions to restrain global warming.

Following the global criticism over its support for building coal-fired plants in countries like Indonesia and Vietnam, and the rollout of new stations at home, Japan’s government is reviewing the policy, Environment Minister Shinjiro Koizumi said in February.

Reporting by Aaron Sheldrick; editing by William Mallard