Standard Bank withdraws funding of new coal-fired IPP projects in South Africa

• 5 years ago (2019-04-18)
• David Flin

Africa 302 Coal 274

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Standard Bank has announced that it will not provide funding for two new independent coal-fired power stations in South Africa. This follows similar announcements by Nedbank and FirstRand, and is in line with new protocols announced by the OECD.

Standard Bank has confirmed that it will not be involved in the financing of either the Thabametsi or Khanyisa new coal-fired IPP projects. This follows a media release on 15 April 2019 which clarified the Standard Bank Group’s position on financing coal-fired power stations both in South Africa and globally.

In January 2019, Nedbank announced its decision to withdraw funding of the Thabametsi and Khanyisa power plants, saying that its decision is in line with its commitment to green funding, responsible lending, and supporting sustainability initiatives. The bank said that its initial proposal for funding the construction of the plants had lapsed and would not be renewed.

This was shortly followed by an announcement from the FirstRand Bank in which it said that it had withdrawn from funding the Thabametsi project in which it was initially involved.

The 557 MW Thabametsi plant would be largely owned by Marubeni of Japan and South Korea’s Kepco, and it was to be built near Lephalale in the Limpopo province. The 306 MW Khanyisa plant was to be sited near eMalahleni in Mpumalanga province, with Saudi-owned Acwa Power as the largest shareholder.

The Thabametsi and Khanyisa plants are designed around circulating fluidised bed (CFB) boiler technology operating at sub-critical pressure and temperature, giving efficiencies of around 32 per cent.

There are a number of legal challenges to the Thabametsi and Khanyisa projects, which have not achieved financial closure after almost two years since being announced by the DoE IPP office. It seems unlikely that these power plants will be built.