Export-Import Bank of the United States Reject Financing of Coal Power Project
On July 18, 2013, the board of the Export-Import Bank of the United States decided to suspend financing of the Thai Binh 2 Thermal Power Plant in Vietnam.
The planned Thai Binh 2 coal fired power plant will generate 1200MW of power and is an important source of power for economically developing Vietnam, but there are concerns about its use of coal, a significant source of CO2.
The Ex-Im Bank’s decision marks the first case in which President Obama’s “Climate Action Plan” announced this June would be put into action.
Preceding the board meeting, 5 environmental groups, Friends of Earth, Greenpeace USA, Pacific Environment, Center for International Environmental Law, and Center for Biological Diversity, submitted a letter to Obama arguing that the Thai Binh 2 power plant project is against the President’s Climate Action Plan and the environment policy of the Ex-Im Bank.
Ex-Im Bank’s decisions to finance projects do not need the Congress’ approval and are based on executive actions, giving the White House the final say. In the past, Obama prioritized increasing American exports over environmental considerations and supported businesses that released large amount of greenhouse gas. Therefore, this decision by the Ex-Im Bank signifies an important policy change favoring the environment.
This decision, which reveals President Obama and the US government’s anti-coal attitude, was welcomed by environmental organizations such as the Sierra Club. There are expectations that financing for coal projects will drastically decline henceforward.
It is expected that Japan follows suit and ends backing of coal power plants overseas. In reality, however, Japan Bank for International Cooperation (JBIC) and Japanese private banks are considering financing the Thai Binh 2 coal power plant, the same power plant from which the Ex-Im Bank pulled away. As anti-coal decisions are made in the US and Europe, will Japan continue to endorse coal power projects and be isolated from other developed nations?
Article from Businessweek (July 18)
Article from Reuters (July 18)
Article from Bloomberg (July 19)
Article from the Hill (July 18)
Press release by the Sierra Club (July 18)