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World Bank is backing dozens of new coal projects, despite climate pledges

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New research shows that the International Finance Corporation, part of the World Bank Group, is providing back-door support to at least 39 new coal projects, constituting over 68 gigawatts of new coal-fired power capacity throughout China, Indonesia and Cambodia.

The International Finance Corporation (IFC), the private lending arm of the World Bank Group, is indirectly backing dozens of new coal projects throughout Asia, according to a new report, Blowing Smoke: How Coal Finance is Flowing through the IFC’s Paris Alignment Loopholes. The report, based on research conducted by Inclusive Development International, Recourse and Trend Asia, was published today, in advance of the World Bank Annual Meetings taking place in Marrakech next week.

“We found that the IFC is still backing new coal capacity through its investments in banks and other financial institutions despite its commitments to align those investments with the Paris Agreement,” said David Pred, executive director of Inclusive Development International. “This is the opposite of the sustainable development that IFC purports to promote, and it is having a devastating impact on coal-affected communities throughout Asia and the entire planet in this time of climate peril.”

A planned 700-megawatt coal-fired power plant called Jambi 2, to be located in Indonesia’s Jambi province, is among the new coal projects the IFC is indirectly supporting. The new report focuses on Jambi 2 as a case study for how the IFC’s lending ends up supporting new coal development and the impact that has on local communities. According to local advocates and community members interviewed by Inclusive Development International, Jambi 2 is a project the province doesn’t want and doesn’t need—one that will exacerbate the already devastating impacts of coal development in the area, including air and water pollution and related health issues. Yet Postal Savings Bank of China—an IFC intermediary and a major coal financier in the region—has provided a credit line to Jambi 2’s developer, China Huadian.

“Ongoing coal development in Indonesia, including the Jambi 2 plant, will accelerate climate change and its catastrophic consequences,” said Novita Indri, energy campaigner at Trend Asia. “It’s a slap in the face to Indonesia, an island nation that is uniquely vulnerable to rising sea levels and already suffering from extreme weather events.”

Postal Savings Bank of China is by far the largest financier of coal developers in the IFC’s portfolio. According to data compiled by Inclusive Development International and published alongside the new report, the IFC purchased a $300 million equity stake in Postal Savings Bank in 2015 and the bank has gone on to provide 418 billion RMB ($57.3 billion) in no-strings-attached credit lines and project loans to companies developing dozens of coal-fired power plants in the region. The bank has provided these loans at a time when much of the financial industry is shifting away from coal, implicating the IFC and the World Bank Group in the last vestiges of coal finance and the devastating impacts it has for coal-affected communities and the climate. The authors of the report are calling on the IFC to leverage its influence as a major shareholder to stop Postal Savings Bank from continuing to finance coal development.

“It’s hypocritical for the IFC to allow its banking clients to finance projects like Jambi 2 and other coal development in Asia while at the same time promising to align its lending with the Paris Agreement on Climate Change,” said Kate Geary, co-director of Recourse. “While committing to move away from coal on paper, the World Bank Group is failing to ensure that its investments aren’t  supporting coal power projects that are significant contributors to climate change and that wreak devastation on affected communities.”

These latest revelations come on the heels of reports last month that communities in Indonesia’s Banten province have lodged a formal complaint against the IFC for backing two new massive units in the Suralaya mega-coal complex. Similar complaints have been lodged against the IFC in the past, including regarding its support for coal expansion in the Philippines.

“The IFC has contributed to serious harms related to coal expansion in many countries,” added Pred. “Now it has a responsibility to repair the damage it has done and prevent future harm by requiring that all of its financial intermediary clients, including Postal Savings Bank of China, stop financing coal development immediately.”

Notes for editors:

Regarding IFC’s financial intermediary lending and “no coal” commitments

Inclusive Development International previously followed the money in the IFC’s financial-sector portfolio and published our findings in our Outsourcing Development investigative series, which exposed (among other things) the coal plants and mines the IFC was indirectly backing.

Since then, the World Bank Group has made a series of commitments designed to reform its approach to investing in financial institutions, reduce its exposure to coal and align itself with the Paris Agreement. Most prominently, in 2019 the IFC launched its Green Equity Approach, which requires financial institutions in which it holds shares to halve their coal exposure by 2025 and eliminate it from their portfolios by the end of the decade. In 2023, the IFC closed a major loophole that Inclusive Development International, Recourse and Trend Asia pointed out in the approach by updating the rules to restrict equity clients from financing any new coal projects.

However, the IFC’s flagship approach aligning its indirect lending operations with the Paris Agreement contains other loopholes and gray areas: it still allows equity clients to underwrite bonds for coal developers, and it allows clients to finance industrial projects that are powered by dedicated coal plants, a concept known as captive coal. And it is unclear how and whether the “no new coal” rule is being applied to existing clients’ corporate financing of coal developers. In fact, as our new research and report show, banks in which the IFC holds equity stakes—including Postal Savings Bank of China—have continued to provide financing to the developers of new coal projects.

Regarding our methodology

For this report, Inclusive Development International traced the International Finance Corporation’s money through financial intermediaries to new coal-fired power capacity in Asia. The full results are here.

We define new coal capacity as projects that have become operational since 2019; projects that are under construction; and projects that have been announced by developers. This data does not include projects that are listed as shelved or canceled, although developers regularly reactivate shelved projects after long periods of inactivity.

For all data on coal plants, including project names, generating capacity, development timelines and project owners, we relied on the Global Energy Monitor, which tracks energy infrastructure around the world. For data on project developers, including their current coal-generating capacities, development plans, and issuances of debt securities, we relied on the Global Coal Exit List, which the IFC also uses  to help its clients identify coal exposures in their portfolios.

All other data comes from research conducted by Inclusive Development International, Recourse and Trend Asia into corporate filings, the International Finance Corporation’s project disclosures, and site visits in Indonesia.

Source: inclusivedevelopment.net

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NGO WORK

New publication: Promise, divide, intimidate, and coerce: Tactics palm oil companies use to grab community lands. Summary Edition

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Recently, the Informal Alliance against industrial oil palm plantations in West and Central Africa has launched a new summary edition of the booklet “Promise, divide, intimidate, and coerce: Tactics palm oil companies use to grab community lands”.

Recently, the Informal Alliance against industrial oil palm plantations in West and Central Africa has launched a new summary edition of the booklet “Promise, divide, intimidate, and coerce: Tactics palm oil companies use to grab community lands”.

This new edition consists of a collection of more than 20 tactics that oil palm companies use to grab people’s land for plantation expansion. It is the result of many years of experience of community activists and grassroots groups who have been struggling to resist the corporate takeover of community lands.
Although the focus is on the tactics of oil palm corporations, many similarities exist with other industries and sectors involved in land grabs and extractivism. The booklet is available in French here, and in English here. If you think the booklet would be useful in other languages too, do not hesitate to let us know!

The the long version, from 2018, is available here: French / English.

Source: World RainForest Movement.

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NGO WORK

Global Witness condemns escalating arrests of climate campaigners in Uganda

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A total of 96 cases of people being detained or arrested for opposing the controversial East Africa Crude Oil Pipeline (EACOP) have been reported in the past nine months, with the number of arrests skyrocketing in recent months.

In December, Global Witness released a report ‘Climate of Fear’ documenting reprisals against land and environmental defenders challenging plans to build the world’s longest heated crude oil pipeline through both Uganda and Tanzania. At the time, 47 people had been arrested for challenging the pipeline in Uganda between September 2020 and November 2023. Double the number of incidents have since been reported in less than a year.

Reports of attacks and threats have continued despite the French oil major behind the project TotalEnergies “expressing concern” to the Ugandan government over arrests in May 2024. Since then, the state crackdown has stepped up against a civil society mobilising to protest the pipeline.

Global Witness is calling on TotalEnergies to meet prior public commitments to respect the rights of human rights defenders and to take immediate action to end the violent crackdown on climate campaigners in Uganda.

Hanna Hindstrom, Senior Investigator at Global Witness’s Land and Environmental Defenders campaign, said:

“The tsunami of arrests of peaceful demonstrators fighting EACOP has exposed the limits of TotalEnergies’ commitment to human rights.

“The company cannot in good conscience press ahead with the pipeline while peaceful protesters are being attacked for exercising their right to free speech. It must adopt a zero-tolerance approach to reprisals.”

On 9 August, 47 students and three drivers were intercepted on their way to protest the pipeline and diverted to a police station. Just six weeks earlier, 30 people were arrested outside the Chinese embassy. In early June, environmental campaigner Stephen Kwikiriza was abducted and detained by the army, who reportedly beat him and dumped him on the side of a road a week later.

NGOs working on environmental conservation and oil extraction have also reported that their offices have been raided, and their staff intimidated and harassed, which has deterred many from speaking out about the pipeline.

Hindstrom added:

“Climate activism is under threat around the world, while fossil fuel companies quietly benefit. European oil companies cannot absolve themselves from responsibility while their investments fuel climate destruction, reprisals and violence overseas.”

Original Source: globalwitness.org

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NGO WORK

‘Land grabbing is rolling along as we speak and in fact intensifying’

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Members of the Landless Workers’ Movement of Brazil (MST) march for agrarian reform. [Image for illustrative purposes only] Credit: MST BA

The International Panel of Experts on Sustainable Food Systems recently released a report highlighting escalating pressures on farmland. It identified four primary drivers: deregulation and financialisation, which treat land as a speculative asset; expanding conservation and carbon offset projects competing for land; mining, urban sprawl, and infrastructure developments encroaching on agricultural areas; and industrialised food systems favouring corporate chains over smallholders. These factors threaten equitable land access for farmers. Nettie Wiebe, a founding member of La Via Campesina and report co-author, emphasized these challenges in an interview with Think Ink, stressing the urgent need for policy reforms to protect agricultural lands and support small-scale farmers.

Here is an excerpt from the interview:

Land is just such an enormously important component of food systems, food security, food sovereignty. It’s also a key component of climate action and biodiversity. So who owns the land and what we do with the land on which we all depend are key components of our possible futures.

[The report] tries to clarify some trends, expose some assumptions, and come up with leverage points where we could make changes that would bring us to a place of greater equality, better protection of environments, and greater food security and sovereignty. […]

Land inequality is an old topic. It’s linked to colonialism, racism, patriarchy: I mean, it’s only relatively recently, in my generation, that women got equal access to land in the Prairies. These are deep seated issues that have troubled rural communities for a long time.

But there are some new trends. Land grabbing is one of those, which became pretty intense in the 2008 crisis and seemed to taper off. But it is rolling along as we speak and in fact intensifying. We looked not just at traditional land grabbing but there are new things like the deregulation of financial markets and the increasing financialisation of land transfers and land accumulation.

Green Grabbing is a relatively new trend that is perversely labelled as environmentally better and hence very difficult for environmentalists and those of us who care about climate change to push against. But for the most part, it is a pernicious diversion from real solutions.

Then there’s the increasing encroachment of urbanisation and mining. Here in Canada, the mining is in the north for the most part, which is not agricultural land. But elsewhere in the world, particularly in South and Central America and in Africa, extractive industries are a real assault on many communities, including small scale farming.

Then, of course, we talked about the assumptions around agriculture as just a productive asset, the bias towards productivism and maximising the production of very few major crops, very few species of animals, and the push to expand those everywhere, at the expense of biodiversity and diverse diets for people.

[…] Everywhere in the world, the increased pressure on the price of land spells displacement for small scale farming. That’s here in Saskatchewan, as well as in Honduras, Brazil, or Zimbabwe. Wherever we look, there’s pressure on land prices from the intrusion of major investors with deep pockets, sometimes governments, often agribusiness.

The report details that there’s a huge expansion in funds that are specifically allocated to grabbing land because it’s a physical asset, a capital asset, which is deemed to be more secure than bonds and other financial instruments.

And the deregulation of the financial market has encouraged, or at least permitted, a lot more of this to go on. That’s a policy issue. A governance issue.

It’s also a values issue. If we see land as just a productive asset to extract value from rather than seeing it as part of our identity, the place where we live, our source of culture and food, our web of life… Land isn’t just bushels per acre and the more you confine it to that domain, the more open it is to financial exploitation. This is a dangerous trend on many levels.

When we say that 70% of farmland is controlled by 1% of the world’s largest farms, that’s a dangerous trend because they don’t love the land. Land is like family: if you don’t love it, you will exploit it and destroy it. That’s what we’re seeing around us.

Source: viacampesina.org

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