How Coal Finance is Flowing through the IFC’s Paris Alignment Loopholes

An investigation by Inclusive Development International, Recourse, and Trend Asia reveals that the International Finance Corporation (IFC) continues to indirectly support coal-fired power projects in Asia through investments in financial intermediaries, despite commitments to align with the Paris Agreement.

• The IFC is exposed to 68.3 gigawatts (GW) of coal-fired power capacity across 39 projects in China, Indonesia, and Cambodia. This capacity includes plants that became operational since 2019, those currently planned, or those under construction.
• The Postal Savings Bank of China is the largest financier of coal developers within the IFC's portfolio. After the IFC purchased a stake in the bank in 2015, the bank provided 418 billion RMB ($57.2 billion) in credit lines to companies developing coal-fired power plants.
• The IFC's 'Green Equity Approach' and Paris Agreement alignment efforts contain loopholes. While the IFC updated rules in 2023 to restrict equity clients from financing new coal projects, it still allows clients to underwrite bonds for coal developers and finance industrial projects powered by 'captive coal' plants.
• The Jambi 2 project, a 700-MW coal-fired power plant in Indonesia, is being indirectly backed by the IFC via the Postal Savings Bank of China, which provided a credit line to the developer, China Huadian. Despite a 2022 announcement by China Huadian that it had withdrawn from the project, PT Perusahaan Listrik Negara (PLN) stated in September 2023 that the project is moving toward financial close.
• Coal development in Jambi province, Indonesia, has caused significant environmental and health issues. Local residents report that mining has led to brown, murky river water, skin conditions in children, and persistent coughs due to coal dust. Additionally, coal trucks have caused traffic gridlock that has prevented sick people from reaching hospitals in time.
• The IFC's indirect financing extends to other major projects, including the Bangko Tengah (SS-8) 1,200 MW plant in South Sumatra and the CIIDG-Huadian Sihanoukville Power Station, a 700 MW plant in Cambodia that became operational in 2022.

APA

Trend Asia (2023). How Coal Finance is Flowing through the IFC’s Paris Alignment Loopholes. https://trendasia.org/wp-content/uploads/2023/10/7574-IDI-Report-Blowing-Smoke-FA-2-Digital.pdf

Chicago

Trend Asia. How Coal Finance is Flowing through the IFC’s Paris Alignment Loopholes. 2023. https://trendasia.org/wp-content/uploads/2023/10/7574-IDI-Report-Blowing-Smoke-FA-2-Digital.pdf.

Wikipedia

{{cite report |author=Trend Asia |title=How Coal Finance is Flowing through the IFC’s Paris Alignment Loopholes |date=October 2023 |url=https://trendasia.org/wp-content/uploads/2023/10/7574-IDI-Report-Blowing-Smoke-FA-2-Digital.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{trendasia2023how, author = {{Trend Asia}}, title = {{How Coal Finance is Flowing through the IFC’s Paris Alignment Loopholes}}, institution = {Trend Asia}, year = {2023}, month = oct, url = {https://trendasia.org/wp-content/uploads/2023/10/7574-IDI-Report-Blowing-Smoke-FA-2-Digital.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }