South Africa’s Absa bank published its policy on coal financing on Thursday, joining other lenders in the opting not to rule out funding for new coal projects altogether.
The decision to continue funding projects under some circumstances leaves South Africa’s lenders – also some of the continent’s biggest banks – out of step with peers elsewhere in the world, which have committed to end all new coal financing.
“Absa will not fund new coal-fired electricity generation unless under extenuating circumstances that will be governed under strict guidelines,” it said in a statement.
Requests for such financing would, effective immediately, be subject to enhanced due diligence criteria, including assessment against country commitments in their national development plans and World Bank guidelines.
The bank added that the financing of new coal-fired industrial boilers or furnaces and projects using metallurgical coal will also be subject to enhanced due diligence, while standards for financing in other climate-sensitive sectors would be added in due course.