JAKARTA — Publicly funded multilateral development banks (MDBs) like the World Bank might finance a wave of “captive” coal expansion in climate-vulnerable countries vulnerable to climate change, which will speed up global warming. A new report reveals that the World Bank’s private sector arm, the International Finance Corporation (IFC), has indirectly financed at least one captive coal project on Indonesia’s Obi Island via its financial intermediary client, Hana Bank Indonesia. The IFC originally invested $5 million in 2007 to support Hana Bank Korea in establishing an Indonesian subsidiary. Then, in 2019, the IFC invested a further $15.36 million to increase its shareholding in Hana Bank Indonesia. In April 2022, Hana Bank Indonesia, together with other banks such as DBS Singapore and UOB Singapore, provided a total of $530 million in term loans to PT Halmahera Jaya Feronikel (HJF), a subsidiary of nickel producer Harita Nickel. This loan was used to pay off the company’s debts and to build the first phase of HJF’s nickel smelter on Obi Island, which will be powered by six captive coal units of 150 MW each. This means that the IFC indirectly financed the smelter and the captive coal units, according to the report, recently published by Recourse, Trend Asia and Inclusive Development International. Nickel, whose processing in Indonesia is often powered by captive coal, is a key element in the batteries that power EVs and energy storage systems. Captive coal also often powers other metals such as steel and aluminum, which are key resources…This article was originally published on Mongabay
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