In January 2019, Nedbank announced their clean break away from financing coal-fired power plans by committing to not finance Thabametsi and Khanyisa, which form part of South Africa’s first round of Coal Baseload Independent Power Producer Programme.
This announcement followed a 2018 declaration that the bank will no longer provide project financing for coal fired power stations excluding the Coal IPP’s which they had committed to.
The Coal IPPS have been embroiled in multiple long-standing legal challenges that have delayed financial sign-off and culminated in the expiry of varying proposals by a syndicate of South African banks to finance the coal IPP’s.
It is now official that Nedbank 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’. This is a momentous step in the right direction for South Africa makes Nedbank the first Africa based bank to use their financial might to cut ties with coal and prioritize their expertise on helping to deliver on the transition to a low carbon economy through scaling up on renewable energy investments.
We welcome the banks intentions to ‘make change happen’ and deliver on the diversification of electricity supply. 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.
With the country’s slow progress in shifting to cleaner power projects in recent years, it is our hope that Nedbank’s commitment accelerates the financial services sectors’ will to initiate reforms that fully exclude fossil fuels from lending and investment policies.