African bank abandons coal projects

The African Development Bank (AfDB) will not fund a coal-fired power plant project in Kenya and has no plans to finance new coal plants in future, senior AfDB officials told Reuters. The Abidjan-based lender published an environmental and social impact assessment in May for the Lamu project, which was planned near a Unesco World Heritage Site but which was halted by a local environmental tribunal, reports Engineering News. The project to build a 1 050 MW plant in eastern Kenya was backed by Kenyan and Chinese investors. AfDB president Akinwumi Adesina told Reuters the bank took environmental concerns seriously and was focusing on renewable energy, adding that coal projects risked becoming 'stranded assets' on the AfDB's balance sheet. Wale Shonibare, AfDB's acting vice president for energy, said the bank 'did not move forward with the Lamu Coal transaction and had no plans to do so in the future'. The AfDB president had told UN climate talks in September that the bank was 'getting out of coal', but he did not give a timeframe or specify whether the Lamu project would be affected. The AfDB's retreat from coal will make it harder for the Lamu project to progress. The AfDB has been a major funder of coal projects in Africa. In the past decade, it has lent more than 1.5bn euros to Eskom for its Medupi coal plant and more than 50m euros for the Sendou coal plant in Senegal. It still plans to finance flue gas desulphurisation units at Medupi to mitigate sulphur emissions produced by burning coal.

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And the European Investment Bank (EIB) has also said it would end financing for fossil fuel energy projects from the end of 2021, reports The Jurist. Over the past five years the EIB has provided more than €65bn of financing for renewable energy, energy efficiency and energy distribution. 'We will stop financing fossil fuels and we will launch the most ambitious climate investment strategy of any public financial institution anywhere,' said EIB President Werner Hoyer. Following the approval of the revised energy lending policy, the EIB will no longer consider new financing for unabated, fossil fuel energy projects, including oil and gas, from the end of 2021 onward.

Full Jurist report