SINGAPORE/JAKARTA: Environmental groups have filed a formal complaint with the World Bank for financial support for two projects Coal-fired power plants And in Indonesia, violating its pledge to stop subsidizing fossil fuels.
The International Finance Corporation, the private sector branch of the World Bank, is an indirect backer of the Suralaya coal-fired power complex through its equity investment in Hana Bank Indonesia, one of the project’s financiers, a consortium of Green groups He said on Thursday.
The Suralaya plant – already the largest in Southeast Asia – has eight units in operation. Plans to build two more would result in 250 million tons of global warming carbon dioxide being released into the atmosphere, the organizations said in a letter to World Bank Compliance Ombudsman Jeanine Ferretti.
“Damage to local communities, including forced eviction of those who were living at the project site, is already occurring,” said the letter, sent on behalf of local grassroots organizations by Inclusive Development International, an American non-governmental organization.
The International Finance Corporation, the World Bank and Hana Bank Indonesia did not immediately respond to requests for comment.
The IFC has pledged to stop investing in coal in 2020, but continues to hold stakes in financial institutions with coal investments, such as Hana Bank, as long as they have plans to phase out their exposure to coal.
It said in rules updated this year that its financial clients must commit not to “establish and finance any new coal projects from the time the IFC becomes a shareholder.”
The Suralaya energy complex has had a severe impact on air quality in the region, incurring more than $1 billion in annual health care costs, the Helsinki-based Center for Research on Energy and Clean Air (CREA) said on Tuesday.
CREA said it also contributes to dangerous smog in the capital, Jakarta, which topped the list of the world’s most polluted cities in August.
PT Indo Raya Tenaga, the developer of the Suralaya plants, said it plans to power some of the new capacity with ammonia, along with coal, to reduce emissions.
The company did not immediately respond to an email request for comment.
According to the Global Energy Monitor think tank, Indonesia was one of 11 countries that commissioned new coal plants last year. Total coal-burning capacity reached 40.6 gigawatts last year, up 60% since 2015, with another 18.8 gigawatts under construction, the third highest amount in the world after China and India.
Last November, Indonesia became the second country to enter the Equitable Energy Transition Partnership, which will provide $20 billion in funds to help reduce its dependence on fossil fuels, but its announcement of investment plans was delayed.
The JETP requires Indonesia to impose a ban on the construction of new coal-fired power plants, although there are exceptions for “captive” plants serving other industrial facilities.

(Tags for translation)World Bank

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