A recent Boston University study published in July 2021 found that Japanese, Korean and Western financiers bankroll 87 % of overseas coal power plants globally, contrary to the misconception that most new funding comes from public financing entities in China.
In fact, before China banned any new funding of overseas coal projects, China accounted for only 13 % of financing for overseas coal power projects.
The private sector from the G7 and other advanced economies make up the majority of overseas coal finance in the world economy. Rather than pointing fingers, the G7 should work with the G20 (including China) and other forums to reign in public and private financing for coal.
- China was the largest public financier of overseas coal plants: The Export-Import Bank of China and the China Development Bank accounted for US$15.6 billion, or 50 percent of global public finance commitments in overseas coal fired power plants that reached financial closure between 2013 and 2018, or 40 percent by generation capacity.
- But 87 percent of total finance (public and private) for overseas coal plants was funded by entities outside China: Altogether, Chinese public and commercial entities (which include policy banks, state and privately-owned commercial banks and firms) financed 32 GW of overseas capacity, accounting for just 13 percent of the coal power capacity outside China that is operational or under development between 2013 and mid-2019 (17 percent of the total overall newly added coal fired power generation capacity outside China during the period, and roughly 11 percent of the power generation capacity under construction or planning outside China).
- Clear and official estimates of non-Chinese international coal funding by the sources of finance are currently lacking: According to independent research, Japanese and Western institutional investors and commercial banks are major financiers of international coal power abroad. While many of these commercial institutions have recently made ambitious climate commitments, better data disclosure on climate-related finance is needed for accountability and policy coordination.