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DBS to end 'dirty coal' lending by year-end, says its chief
DBS will end financing of projects that burn low-grade coal, or what is known as "dirty coal", by the end of the year, its chief executive Piyush Gupta said on Thursday.
But the bank will continue to finance projects in emerging markets that burn "higher quality" coal, while at the same time, start building out a portfolio of renewable energy projects to shift the mix of its loans, said Mr Gupta at a results briefing.
"In respect of coal, we start with one caveat. We've got to remember that the bulk of energy needs in our part of the world are from coal," said Mr Gupta.
He cited reports noting that by 2040, coal will still account for about 40 per cent of the generation mix.
"It is important to understand that you can't turn this off," he said. "It's not that straightforward an outcome, for either society or the environment. So you've got to be thoughtful about how we transition."
DBS has nevertheless sewn up a few deals linked to burning such "low-grade" coal this year, and will not pull out of these loans due to pre-commitment.
A report by Australian environmental advocacy group Market Forces in January said that DBS, OCBC and UOB have financed 21 coal project deals since 2012 worth US$2.29 billion. Of these, more than half were for coal-fired power stations that are mostly in Indonesia and Vietnam.