COAL FOR CLIMATE?

The report argues that the World Bank Group, Asian Development Bank, and Asian Infrastructure Investment Bank have policy gaps regarding 'captive coal'—coal plants dedicated to industrial facilities. It highlights how these loopholes risk funding carbon-intensive processing of minerals like nickel, which are essential for the energy transition, thereby undermining global climate goals.

• Joint MDB commitments to end coal financing contain a significant gap as they do not cover coal used for industrial purposes, and some climate spending guidelines may actually encourage the support of coal-powered industrial facilities.
• The International Finance Corporation (IFC) is exposed to captive coal on Obi Island, Indonesia, through financial intermediary investments in Hana Bank Indonesia and OCBC NISP, the latter of which received a $200m debt investment for a Sustainability Bond programme.
• The IFC's 2023 commitment to stop funding new coal explicitly excludes captive coal, meaning its clients can continue to support such projects.
• The World Bank Group's Energy Sector Directions paper explicitly states that it does not apply to captive coal units used for industries such as cement and steel production.
• While the Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB) do not have explicit carve-outs for captive coal, the report notes a lack of transparency regarding subprojects funded via financial intermediaries that could hide such investments.
• In Indonesia, captive coal capacity is projected to more than double from 14.2 GW to 32.7 GW if current expansion plans are followed, largely to support the nickel processing industry for electric vehicle batteries.
• Captive coal development on Obi Island has been linked to severe environmental and social harms, including the production of 4 million metric tons of toxic waste annually by the PT Halmahera Persada Lygend refinery and increased rates of respiratory illnesses among local populations.
• The AIIB's 2022 Energy Sector Strategy contains the most specific language against captive coal, committing not to finance projects that would not be carried out without a dedicated coal-based power supply.
• The report identifies a contradiction in the IFC's gender and climate goals, as captive coal development on Obi Island disproportionately burdens women with increased domestic labor to clean invasive coal dust.

APA

Trend Asia (2024). COAL FOR CLIMATE? https://trendasia.org/wp-content/uploads/2024/07/Captive-coal-MDBs-July-2024.pdf

Chicago

Trend Asia. COAL FOR CLIMATE? 2024. https://trendasia.org/wp-content/uploads/2024/07/Captive-coal-MDBs-July-2024.pdf.

Wikipedia

{{cite report |author=Trend Asia |title=COAL FOR CLIMATE? |date=July 2024 |url=https://trendasia.org/wp-content/uploads/2024/07/Captive-coal-MDBs-July-2024.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{trendasia2024coal, author = {{Trend Asia}}, title = {{COAL FOR CLIMATE?}}, institution = {Trend Asia}, year = {2024}, month = jul, url = {https://trendasia.org/wp-content/uploads/2024/07/Captive-coal-MDBs-July-2024.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }