NedBank, one of Africa’s largest financial services provider, officially ended its financing of coal-burning electricity projects after years of campaigning from local groups.
With the public release of its Sustainable Development Review on Friday, April 5, 2019, NedBank declared that it has: “undertaken not to provide project financing or other forms of asset-specific financing where proceeds would be used to develop new coal-fired power plants, regardless of country or technology”.
Responding to the announcement, Ahmed Mokgopo, Divestment campaigner for 350Africa, said: “This is a momentous step in the right direction for South Africa and the continent.
“This announcement makes Nedbank the first African bank to pay attention to the climate breakdown happening around us and to use their financial might to cut ties with coal-fired power plants.”
In January 2019, Nedbank announced its intention to break from financing coal-fired power plants by committing to not finance Thabametsi and Khanyisa, which form part of South Africa’s first round of Coal Baseload Independent Power Producer Programme.
Friday’s report confirms this is part of a sector-wide approach, adds 350Africa.
“With the continent’s slow progress in shifting to cleaner power projects in recent years, Nedbank’s commitment will send a strong signal to the financial services sector that it’s time to initiate reforms that align finance flows with the Paris Agreement on climate change. These banks must prioritize their expertise to help deliver on the transition to a low carbon economy through scaling up renewable energy investments in communities. Local campaigners will continue to push for real and democratic energy access solutions, based on renewable and sustainable technologies,” Mokgopo continued.
The announcement by NedBank is said to be the first in Africa but follows a steady flow of announcements by banks and investors blacklisting coal and other fossil fuels that drive climate change.
Yossi Cadan, 350.org’s Global Divestment Campaigner, said: “Many leading banks have policies against investing in coal projects, that is because the projects are toxic – they pollute communities, drive climate change, and given current trends will most likely represent stranded assets with no financial upside.
“We expect to see more announcements like this one every week but congratulations to the local campaigners for helping Nedbank to see the writing on the wall. A no exceptions approach to coal, gas, and oil finance is the standard all banks in all parts of the world should adopt.” In South Africa, coal accounts for 77% of electricity output.
However, the country’s coal dependency has come at a heavy price, with Witbank, situated in the country’s coal belt, being labelled as one of the worst places in the world for air pollution. A recent report by the Climate Policy Initiative also found that South Africa’s dependency on fossil fuels will become ever more costly in time, unless radical action to invert this trend is undertaken.