Financial institutions will jointly invest in accelerating the closure of Asian coal-fired power stations. This would happen under pressure from large investors of organizations that consider sustainability necessary, reports Reuters news agency.
The first power station to be closed could be purchased as early as next year.
The initiative of the banks Citi and HSBC, insurer Prudential and investment company BlackRock, among others, is led by the development bank Asian Development Bank. A collaboration between governments and companies is being sought to buy the coal-fired power stations.
Those plants can then be shut down within 15 years, a time in which workers can find new jobs and alternative renewable energy sources can be developed.
The first talks with Asian governments and banks are said to have gone well. More should be clear for the upcoming international climate summit (COP26) in Glasgow in November. The parties hope to secure financing and other commitments there. However, it is still unclear how plant owners are enticed to sell their property and what will happen to the plant once it is no longer in use.
Coal-fired power stations are responsible for a fifth of global greenhouse gas emissions and are seen as the largest polluter. Demand for coal continues to increase, according to the International Energy Agency (IEA). This year across the board, at 4.5 percent, more than three-quarters of that increase comes from Asia.
First, we look at power stations in Indonesia, Vietnam and the Philippines. To cut emissions from coal-fired power plants in half in those three countries would require an investment of 30 to 55 billion dollars, according to Prudential. The plan is to reduce carbon emissions from the plants and part in renewable energy sources.