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View all search resultsWorld moves away from coal, and so does ADB
Reports from a global energy think tank Institute for Energy Economics and Financial Analysis (IEEFA) in February showed that over 100 globally significant financial institutions have divested from thermal coal.
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Heavy load: Front loaders transport coal to a truck at a port in Lianyungang, Jiangsu province, China, on Saturday. China’s import growth stood at 3 percent in November, the slowest since October 2016, and a fraction of the 14.5 percent seen in a Reuters poll. (Reuters/Stringer)
T
he Asian Development Bank (ADB) has said it is staying away from coal-related projects in Indonesia and continues to open itself to gas and renewable energy investments, joining the wave of diversion by hundreds of financial institutions around the globe.
Yuichiro Yoi, ADB unit head for Indonesia, infrastructure finance division 2 private sector operations dept., told The Jakarta Post that economic factors and public sentiment were the two reasons to avoid coal investment.
“The world's moving away from coal, that’s the sentiment I can't change or deny, that is the sentiment in the majority of the world. I just have to play along," he said on the sidelines of a gas exhibition in Jakarta on Thursday.
"If it [coal power plants] become a stranded asset, it is a credit risk. Going forward it'll be more difficult to do a project with coal. Now you not only worry about reputation but also have to worry about the risk of losing money."
Reports from global energy think tank Institute for Energy Economics and Financial Analysis (IEEFA) in February showed that over 100 globally significant financial institutions have divested from thermal coal, including 40 percent of the top 40 global banks and 20 globally significant insurers.
They are increasingly reluctant to invest in companies related to fossil fuels as the commodities are deemed unsustainable amid rising pressure to limit environmental damage.
In May, Norwegian pension fund manager KLP sold bond and equity exposure worth 3.2 billion crowns (US$366 million) in 46 companies after a decision to withdraw from thermal coal, Reuters reported. The fund divested its stake in BHP, Anglo American, Glencore and Vale, as well as its shares in publicly listed diversified conglomerate PT Astra International and subsidiary PT United Tractors, whose core business is coal mining and heavy equipment.
