African lender Standard Bank has ruled out funding coal-fired power plants and most oil-fired plants in plans to reach zero emissions by 2050, though environmentalists say it can still do more.
Several financial services firms have set net-zero targets to combat global warming but are being pressed to provide more specifics about how to achieve them, including short-term reductions.
The Standard Bank, a leading oil and gas lender in Africa, has caught the ire of activists. According to them, the new fossil fuel strategy did not guarantee emissions reductions or rule out supporting projects, such as a planned pipeline to Uganda.
The bank’s new strategy bans funding for new coal-fired power plants, which it hasn’t financed since 2009, and enlarging existing plants. It might be possible in some cases to build mines.
In addition, the bank announced that new oil-fired plants or expansion plans would only be feasible in limited circumstances and that oil exploration and production loans would be reduced by 5% by 2030.
The bank’s CEO, Kenny Fihla, says Standard Bank’s new climate policy leaves open the possibility of the bank financing the East African Crude Oil Pipeline (EACOP), which will connect Uganda with Tanga port in Tanzania.
He said, “Our intention is to ramp up our funding of renewable energy and we are setting a target of between R250 billion and R300 billion in the next five years. We’ll also be reducing our exposure to coal over time with a view of getting to zero by 2050… what that entails is we’ll restrict funding to new coal mines, to coal-fired power stations. Any new funding to that sector will be very, very limited and directed only at those initiatives that are aimed at reducing carbon emissions.”
