Arif Fiyanto, Climate and energy coordinator at Greenpeace Southeast Asia, published an opinion piece in the Jakarta Post on the future of Indonesian coal, citing BIC’s research on Development Policy Loans. Fiyanto notes that international financiers are continuing to fund the construction of coal plants, despite the declining strength of the coal market relative to renewable energy.
According to preliminary research by the Bank Information Center ( BIC ) and Greenpeace, between 2007 and 2015, USD 1.4 billion was approved in loans for energy projects, nearly all of which had gone to fossil fuels.These loans are supposed to help countries move to a low-carbon development path to better protect the environment.
But that’s not happening in Indonesia. The money is instead supporting carbon-heavy infrastructure, which will be with us for decades, regardless of the wishes of local people as we have seen in the development of the Batang coal power plant. It is just one of many power plants being supported by international development loans and guarantees, backed by global multilateral development banks, like the World Bank and the ADB, and financiers like JBIC. The bank’s president, Jim Yong Kim, said this month that if all coal plants in the south and southeast Asia go ahead, “we are finished […] it would spell disaster for us and our planet”.
The World Bank needs to listen to its president’s warning. Bank lending for development must prioritize low-carbon development over fossil fuels. All multilateral banks must cut incentives and guarantees for carbon-intensive projects in Indonesia.
- Arif Fiyanto
BIC is currently carrying out research on the role of multilateral banks in financing Indonesian coal. Further information can be found on our Development Policy Loan page.