Xi pledge gives coal bad bank fund more fuel

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Chinese President Xi Jinping speaks remotely during the 76th Session of the General Assembly at UN Headquarters in New York on September 21, 2021.

MELBOURNE, Sept 22 (Reuters Breakingviews) - President Xi Jinping has promised that China will no longer build coal-fired power stations abroad read more . As the largest financier of such projects, Beijing’s announcement at the United Nations General Assembly on Tuesday is a significant boost to efforts to reduce carbon emissions. It should also bolster a nascent plan to set up an Asian coal bad bank fund .

Led by the Asian Development Bank and UK insurer Prudential (PRU.L), the scheme would raise concessional equity from governments, development banks and the like, leverage that perhaps five-fold in the bond markets and then use the proceeds – as much as $120 billion - to buy and close coal plants in places like Indonesia and Vietnam earlier than currently planned. It has plenty of challenges, not least ensuring enough renewable energy replacement. Another was China’s willingness to bring new coal plants into operation. Xi’s pledge takes that risk off the table. (By Antony Currie)

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Editing by Ed Cropley and Karen Kwok

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