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Energy

Japan government lender won't get out of coal overseas

Others will provide financing if Tokyo doesn't, JBIC chief argues

Smoke billows from a coal-fired power plant in Harbin, China. Coal is facing headwinds around the world for the amount of carbon emissions it produces.   © Reuters

TOKYO -- Despite growing global pushback against coal-fired power plants, the state-owned Japan Bank for International Cooperation plans to continue financing such projects overseas, bucking growing divestment efforts among private-sector lenders. 

"Is divestment the solution?" JBIC Gov. Tadashi Maeda asked at a news conference Thursday.

"If Japan does not provide financial assistance, another country will," he stressed. Many emerging economies still have underdeveloped electrical grids, the governor explained.

Many financial institutions in rich nations are divesting from coal, given its carbon footprint. Japanese Environment Minister Shinjiro Koizumi has announced that Japan will consider tightening rules for assisting in the export of coal-fired power plants.

But Maeda does not seem to be swayed by the trend. "Our duty is to promote more advanced technology that has less of an environmental impact," he said, signaling that bank will continue to back facilities that have adopted such technologies.

He voiced frustration with big Japanese banks over freezing new lending on coal power projects. These banks are part of the same projects that JBIC is involved in, and the state lender "is saddled with the responsibility," he said.

On bringing new coal power technology to emerging economies, Maeda said projects that build and operate facilities locally will be prioritized over simple exports to these markets.

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