Pre-G7 International Symposium
Climate Change and Energy: Coal-fired Power Generation Issues

Problems of the Financial Support forOverseas Coal-fired Power Generationby Japan Bank for International
Cooperation (JBIC)
May 20, 2016
Japan Center for a Sustainable Environment
and Society (JACSES)
Yuki Tanabe
14 Questions on Overseas Coal-fired Power
Generation funded by JBIC
1. Why we focus on the overseas coal-fired
power generation funded by JBIC?
2. What impacts does the OECD Agreement
have on the investment of JBIC?
3. Will emerging countries provide lower
efficiency plants, when OECD stops thesupport?
4. Are overseas coal-fired plants supported by
Japanese companies low-pollution?
2

Question1: Why we focus on the overseas coalfired power generation funded by JBIC?
• JBIC is a 100% government-owned financial
institution with missions of promoting the resource
acquisition in foreign countries and improving thecompetitiveness of Japanese industries.
• In 2003-2016, JBIC has invested in 24 coal-fired
power plants including 6 projects in Vietnam, 5 inIndia and 4 in Indonesia, with a total capacity of
24GW at a total lending of 8.5 billion USD.
• The estimated annual CO2 emission of those 24 coalpower plants is about 140 million tons, which is 10%of that in Japan.
3

Finance for Coal by Financial Institutions
The amount of Investment, 2007-2014 (billion USD)

Source : Under The Rug (NRDC, Oil Change International and WWF)

4

Question 2: What impacts does the OECD
Agreement have on the investment of JBIC?
• OECD members established the OECD Export Credits
Arrangement, which is a common rule on interest
rates and repayment terms of official export credits.
• On November 2015, the Sector Understandings ofcoal-fired generation projects was agreed, as anappendix of the Arrangement.
• However, the support for Ultra Supercritical (USC) isalmost unconditionally accepted. And so do that ofsmall and medium-sized Supercritical (SC) and
Subcritical in low income countries• Moreover, as the Sector Understandings cover Export
Credits, only 10% of JBIC portfolio is potentiallyaffected. The expansion of scope is needed.
5Is Ultra Supercritical (USC)
the low carbon technology?

Source: Agency for Natural Resources and Energy Japan, The issues of thermalpower generation→ Even with the use of USC, the amount of CO2 emissions
is around 800g-CO2/kWh, which is approximately twice asmuch as with LNG plants.
6The Scheme Examples of Export Loans (Left) andOverseas Investment Loans (Right) of JBIC

Source ：JBIC Website
7

JBIC Portfolio of Loans, Equity Participations andGuarantees (FY2014)
Guarantees
10%
ExportLoans
13%

EquityParticipations1%

UnitedLoans 1%

Overseas
Investment
Loans
75%

Source：JBIC Annual Report 20158

Comparison of Coal Support with/without OECD
Arrangement, 2007-2013 (billion USD)

Source : Under The Rug (NRDC, Oil Change International and WWF)

9Question 3: Will emerging countries provide lower
efficiency plants, when OECD stops the support?
• 80% of public finance for coal is by international
finance institutes and public institutions of OECD.
The constructions could be restrained, since emerging
countries can not be replaced in all cases.
• At the U.S.-China Summit, the Chinese Government
committed to strictly control as for public support ofoverseas coal-fire power generations.
• Ultra Supercritical（USC） is also exported from China,
so only facilities from Japan are not high efficiency.
• Under the situation of competitive cost of renewableenergy, the cost of coal projects will increase without
the public support by OECD, eventually power source
selecting can be changed.
10International Public Finance for Coal 2007-2014
by Institution Type (billion USD)

Source : Under The Rug (NRDC, Oil Change International and WWF)

→80% of the finance for coal is by international finance institutions
and public institutions of OECD. ECA of OECD is the biggest financeinstitution as it takes 47%.
11

Boiler Manufactures for Operating/Under
Construction/Planned Coal Plants Capacities (MW)in SE Asia and South Asia Combined
JapanChinaSouthKoreaIndia

RussiaSuper
critical

10,09055,65011,30040,3201,980

UltraSuper
critical

2,000

2,680

2,680

1,3200Source: WWF etc, Will the OECD lag behind emerging countries
because of Japan?
12

Overseas Coal-fired Power Generation funded by China→According to CPI report, 30 billion of 72 billion dollars ofinvestment could be canceled. It is notable how much China will
invest overseas coal-fire power generation hereafter.
Source ：Climate Policy Initiative, Slowing the Growth of Coal Power outside China

13

Outcome of Coal Power Proposals in theDevelopmental Pipeline 2010-2015 (MW)East Asia
SoutheastAsia
South Asia
WorldTotalHalted(Shelved orCancelled)

Implemented(In Conclusion ofOperating)

236,870

512,855

32%

38,56049,55544%405,840

175,60570%

885,708

812,534

52％

Percent
haltedSource :Coalswarm etc, Prosperity and Depression in 2016
14

Comparison of the Cost in Coal-fired Power
Generation (Imported Coal and Domestic Coal) andSolar Generation in India

Source: KPMG, The Rising Sun

15

Prediction of New Capacity of Coal-fire Power
Generation and Solar Generation in India

Source : Deutsche Bank, India 2020: Utilities and Renewables

In September 2015, Reliance announced the withdraw from 12GW of coal-fire
power generation plans.
16Question 4: Are Coal-fired Plants Supported byJapanese Companies Low-Pollution?
Batang(Indonisia)
Capacity(MW)Kudgi(India)

Isogo New 2

Hekinan 5

2000

2400

600

1000

2018
(Proposed)

2016

2009

2002

Type of powergeneration

USC

SC

USC

USC

SOx measures

SWFGD

None

DFGD

FGD

SO2 emission
conc. (ppm)

105

321

1025

NOx measures

LNB

Unknown

SCR/LNB/TSC

SCR/LNB/TSC

NO2 conc.(ppm)1273161315PM conc.
(mg/Nm3)

50100

55Start ofoperationSource: FoE Japan

17JBIC funded projects’ SO2 removal technology
Technology
Seawater Desulfurization

Proportion

Circulating Fluidized Bed Semi-Dry FGD
Fluidized Bed
Wet Limestone FGD

2％
7％
22％

Wet Lime FGD
Usage of low-sulphur coal(no desulfurization equipment)

1％36％

No desulfurization equipment

11％

20％

Source ：Platts WEEP, January 2015

Of all JBIC funded coal-fired power plant facilities,
approximately half lack desulfurization equipment.

New emission standards in Indiaand International standards
The expectingemission fromCoal-fired power
generation inDarlipaliThe domesticstandards inIndia (FromJan 2017)

World Bank
Group’s EHS
Guideline

SO2/SOx

1224mg/Nm3

100mg/Nm3

200-850mg/Nm3

NO2/NOx
PM860mg/Nm3
50mg/Nm3

100mg/Nm3
30mg/Nm3

510mg/Nm3
50mg/Nm3

Source：JBIC, Indian Government Gazette, International Finance Corp.（IFC）→Lower pollution cannot be achieved by investing
based on international standards. These standards
should be strengthen.

19

Recommendations for G7• Make financial flows consistent with the 2degree goal. (coal fired power is aninconsistent)• Include a condition of consistency with the 2
degree goal in the “Quality Infrastructure.”(coal fired power is an outside of the scope)20