GEOFF BROWN
JOHANNESBURG - Plans for new coal plants threaten to push 26 “frontier countries”, including South Africa, into a cycle of coal-dependency, according to the latest Global Coal Exit List (GCEL), released yesterday.

More than 200 financial institutions are now registered users of the database and investors representing close to $10 trillion (R146.6trln) in assets are using one or more of the GCEL’s criteria to screen coal companies in their portfolios.

The index is compiled by Germany's non-profit Urgewald and 30 other non-government organisations.

GCEL said 26 commercial banks had committed to no longer participate in project finance deals for new coal plants, while nine major banks have also committed to ending corporate finance for clients whose coal share of revenue or coal share of power generation is above a designated threshold.

In South Africa all the major banks have been pulling out of funding coal-fired plants due to environmental and social concerns.

Nedbank, FirstRand and Standard Bank have said they intend to stop financing coal-fired power plants in the future.

It found that BlackRock was the world's largest institutional investor in coal plant developers. In December 2018, it held shares and bonds valued at more than $11 billion in these companies, it said.

The GCEL said that while the global coal plant pipeline shrank by more than 50percent in the past three years, new coal plants were still planned or under development in 60 countries around the world.

If built, these projects would add more than 579GW to the global coal plant fleet, an increase of almost 29percent. "The 2019 GCEL identified 259 coal plant developers,” it said.

The four countries with the most coal companies were China (164), India (87), the US (82) and Australia (51).

GCEL said the country with the largest coal power expansion plans abroad was China.

It said that while some large coal miners such as South32 had begun offloading their thermal coal assets, most of the world's largest coal producers were still in expansion mode.

Of the 30 companies, which account for half the world's thermal coal production, 24 were pursuing plans to still increase their coal production. It said that Glencore, the world’s 8th largest coal producer, was recently applauded by climate-concerned investors for agreeing to set a cap of 150 million tons for its annual coal production.

This week, miner Exxaro Resources said it had extended its focus beyond coal to renewable energy.

It announced that it had bought the remaining 50percent stake in the independent power producer Cennergi for R1.55bn.

Last month, the National Treasury issued its first real indication of its plans to unbundle Eskom, stating that it would consider disposing of the debt-ridden power utility's coal-fired power stations in an effort that could potentially raise about R450bn.

BUSINESS REPORT