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Firms clean up act, spell death of dirty fuels

FINANCIAL STANDARD
By Peter Theuri | May 26th 2021
Nuclear Power Plant. [Courtesy]

As the push for cleaner energy intensifies, more and more companies around the globe are distancing themselves from funding unclean energy sources, such as coal-fired power plants.

The move comes at a time when coal, responsible for immense atmospheric pollution, is increasingly becoming unpopular even among Western countries, some of which industrialised using the energy source.  

“We will no longer finance new coal-fired power plants except where there is an existing commitment anywhere in the world,” announced Standard Chartered Bank in September 2018.

“We have taken the decision after detailed consultation with a range of stakeholders. This announcement is part of our updated position statement on power generation. Here for good means saying no to coal.” 

But despite the growing opposition to the development of new coal-fired power plants, Kenya has been pushing to add the energy source to its electricity generation mix, with the Sh200 billion Lamu coal power plant being its flagship project towards this end.

There are also plans for coal mining in the Mui Basin in Kitui County, which has been dogged by numerous delays due to the politicisation of the project.

Besides Stanchart Bank, other companies that have withdrawn funding for coal projects, including the Lamu coal project include China’s ICBC Bank, one of the largest in the world, which was to lend about half of the Sh200 billion required to build the Lamu coal plant that would produce 1,050 megawatts (MW) of power on completion.

South Africa’s Standard Bank, an affiliate of ICBC, was also going to fund the project but announced in 2017 it was pulling out, saying it had started reducing its carbon footprint annually as much as possible. 

Stringent conditions

“We reduce our own carbon footprint as much as possible each year. We have funded far more renewable energy generation than coal-fired power. We will apply very stringent conditions to any future funding of non-renewable energy,” said the bank.

The African Development Bank (AfDB) had at some point also considered financing the plant, while America’s General Electric (GE) was to provide what it termed “clean coal technology,” which would bring down pollution.

Both entities, however, have since ditched plans to fund the project as well as other coal projects around the world going forward. 

Newly elected United States President Joe Biden following his inauguration early this year underscored the seriousness of the threat posed by the continued exploitation of unclean energy sources such as coal by signing a treaty that saw America rejoin the Paris Agreement.

He also reversed his predecessor Donald Trump’s decision to exit the binding international treaty on climate change. 

The US also intends to cut carbon emissions in half by 2030.

Such moves have meant entities involved in projects responsible for the massive production of greenhouse gases have to change tack. 

National Environmental Complaints Committee (NECC) secretary John Chumo said the institution is advocating for companies to embrace “the new world order” and move to green energy.

“If you want to finance energy, finance clean energy,” he said.

“Sustainable development is where you can balance between development and conservation. If it is negative to the environment, then that is not development,” added Mr Chumo.

Concerns over the damage that mining, transportation and manufacturing have on the environment have seen lenders pull out of projects.

Thomas Reuters Foundation recently reported that 263 charities have urged banks not to finance a $3.5 billion (Sh374 billion) oil pipeline that links Uganda to the Tanzanian coast.

They are concerned that the project could lead to the loss of community land and livelihoods, contribute to environmental destruction and cause a surge in carbon emissions.

France’s Total and China National Offshore Oil Corporation are due to start work on the 1,445km pipeline from western Uganda through neighbouring Tanzania to the Indian Ocean port of Tanga.

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