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Nearly all development banks committed to cutting coal investment, data shows -Breaking

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© Reuters. FILE PHOTO – Men standing by cars near Shanghai’s coal-fired power station, October 21st 2021. REUTERS/Aly Song

By David Stanway

SHANGHAI (Reuters). Nearly all of the international available financing for development is now dedicated to reducing or stopping investment in coal-fired electricity after China and G20 moves to end support of new projects abroad, according to new research.

On Sunday, G20 nations committed to ending foreign financing for coal-fired plants. This was just as a new round began at climate talks in Glasgow. The pledge was similar to that made in September by Xi Jinping (Chinese President) at the United Nations General Assembly.

New research by Boston University’s Global Development Policy Center shows that the G20 promise means that 91% of development finance institutions have committed to reducing coal investments and supporting renewables.

Rebecca Ray, senior researcher at GDP Center and one the study’s co-authors said, “If these institutions fulfill their commitments it will be easier to find official financing for renewable energy, coal power phase out, or for building new coal-fired plants.”

Only three of the most important “holdouts”, the Development Bank of Latin America, Islamic Development Bank, and New Development Bank were identified in the report. Many of their major shareholders had been part of G20’s pledge.

The study stated that Xi’s Sept. announcement by China that China will no longer participate in overseas coal project was its most notable change. It deprived coal-fired energy of its major financial backers such as the China Development Bank or the Export-Import Bank of China.

This decision seems to have immediately affected the country’s financial institutions. The Bank of China has pledged to stop new coal mining or power projects overseas starting October.

Experts involved in the development of guidelines for China’s Belt and Road investment projects stated that Chinese financial institutions knew about the waning coal-fired power demand, which made it much easier for Xi to implement his order.

According to an expert who was not authorized to speak on the topic due the confidentiality of the issue, “They’re very serious about it.” “They don’t look for excuses not to keep going with the projects. They want reasons to not continue.”

China’s exit from China was an unusual alignment of climate, economic, and political interests.

Matt Gray, analyst at TransitionZero said that economics are changing and they have had bad experiences with financing coal under the Belt and Road Initiative. This has led to host country defaults on their debt. “I believe they now have all the necessary political signals to stop investing.

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