Written reply to Parliamentary Question on local banks refinancing coal power projects overseas
Date: For Parliament Sitting on 3 March 2023
Name and Constituency of Member of Parliament
Mr Leon Perera, MP, Aljunied GRC
To ask the Prime Minister whether MAS will consider placing limits on local banks refinancing coal power projects overseas.
Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:
1. Financing the progressive decarbonisation of hard-to-abate sectors and energy sources is a key priority globally and in Asia.
2. With regard to coal, we start from a situation where it is the largest source of electricity generation and a significant fuel for industrial use in AsiaInternational Energy Agency, Coal in Net Zero transitions, November 2022.. Financing should aim at supporting the progressive phase-out of coal and shift to cleaner fuels without major disruption to the developing economies in the region.
3. MAS’ guidance to banks is that such financing should be on the basis of credible transition plans that mitigate their exposures to environmental risks and are aligned with the Paris Agreement goals.