Singapore banks under scrutiny over coal lending

Rapid switch to renewable energy not feasible for now, say lenders, but aim is to get clients to go green

The Paiton coal-fired power station complex in East Java, Indonesia. A consortium of banks, including DBS, HSBC and Citigroup, was involved in a recent US$2.75 billion bond issue and loan for the complex. DBS recently became the first local bank to r
The Paiton coal-fired power station complex in East Java, Indonesia. A consortium of banks, including DBS, HSBC and Citigroup, was involved in a recent US$2.75 billion bond issue and loan for the complex. DBS recently became the first local bank to release a climate policy, but some feel this is not enough. PHOTO: CEPHOTO, UWE ARANAS
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Singapore's three local banks are facing greater scrutiny for their lending to coal-fired power plants in the region, over fears the projects will exacerbate climate change by locking in years of polluting emissions.

The banks say coal financing is meeting an investment need. And a rapid switch to renewable energy is not feasible for now, they add - though they also say they aim to progressively encourage customers to take a greener path.

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A version of this article appeared in the print edition of The Straits Times on March 12, 2018, with the headline Singapore banks under scrutiny over coal lending. Subscribe