Standard Bank says it will continue to fund thermal coal and coal-fired power generation operations under strict conditions since they play an important role in the generation of electricity in the region.
“Energy generation in South Africa and Sub-Saharan Africa in particular, is still more than 80% driven by coal fired power stations, so clearly, in that scenario, we will continue to support the generation of electricity,” said Kenny Fihla, CEO of Standard bank Corporate and Investment Banking at Standard Bank Group.
However, Fihla said the bank will provide the support under strict guidelines regarding the nature of the mining operations, their use of coal and how the coal is transported. The bank will also look at additional measures the operations have put in place, to ensure that there is environmental rehabilitation after mining activity.
Fihla was speaking at Standard Bank’s launch of its Fossil Fuels Financing policy on Thursday. The policy outlines the conditions under which the bank will fund coal, oil and gas projects, such as whether the projects comply with the Equator Principles, the International Finance Corporation’s performance standards and the World Bank’s environmental, health and safety guidelines.
The bank has previously been questioned by climate groups about its continued funding of fossil fuel projects in Africa, as concerns about climate change rise. But Fihla said the bank cannot stop funding and will instead continue to support coal mining in a responsible manner that emphasises the use of technology that reduces carbon emissions.
“Unfortunately, if we were to stop completely to fund any coal mining related activity, we can as well say we are stopping 80% of South Africa’s electricity generation and we do not think that will be a responsible thing to do,” he said.