Standard Bank withdraws funding of new coal IPPs in South Africa

Standard Bank has reconfirmed its commitment to clean energy by announcing its decision to withdraw its funding on the construction of the Thabametsi and Khanyisa coal-fired Independent Power Producers (IPPs) projects.

This decision comes after Nedbank and First Rand Bank’s decisions earlier this year to withdraw funding for these projects.

In a statement released on Monday, the bank confirmed its withdrawal and asserted its position on funding coal power projects in Africa and globally, saying that it “has set up a strict set of parameters that will guide all future financing decisions as they relate to new coal-fired power stations. These parameters apply to the Standard Bank Group and to all its operations globally. If a proposed development does not meet these parameters, Standard Bank will not provide finance.”

Among its reasons for the withdrawal, the bank also cited the importance of its participation in the global shift toward affordable, reliable and clean energy.

“Standard Bank supports the adoption of higher efficiency, lower emission coal-fired power plants, and carbon capture and storage technologies (where possible) to reduce the environmental and social impacts of coal-fired power generation,” the statement said.

The Thabametsi (577MW) and Khanyisa (306MW) power plants form part of the Department of Energy’s draft Integrated Resource Plan, which proposed an increase of new coal by 50 percent by 2030. Challenges to secure funding for the power plants could result in them not being constructed.

This announcement comes as national power utility company, Eskom, struggles to find the solutions that will see it meet the country’s power supply needs.

The Thabametsi plant is owned by Marubeni and Kepco while ACWA Power is the holds majority shares in Khanyisa. The plants were set to be built in the Limpopo and Mpumalanga provinces, respectively.