World Bank branch indirectly backs coal megaproject despite green pledge

(Climate Home News, 22 Oct 2020) The World Bank’s private lending branch is indirectly backing one of the world’s biggest new coal complexes, despite a new green policy.

In September, the International Finance Corporation (IFC) published its green equity approach (GEA), outlining that: “IFC no longer makes equity investments in financial institutions that do not have a plan to phase out investments in coal-related activities.”

Yet the client it chose to pilot the approach with in 2019, Hana Indonesia, has since approved project finance to the 2,000 MW Java coal power station in Banten, Indonesia.

A source with knowledge of the matter told Climate Home that when confronted, IFC officials claimed not to be aware of Hana Indonesia’s involvement in the coal megaproject.

“We are in discussion with PT Bank KEB Hana Indonesia to better understand its recent lending activities,” a spokesperson for IFC said.

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Climate Home News, 22 Oct 2020: World Bank branch indirectly backs coal megaproject despite green pledge