by Myrna Velasco July
12, 2016
Norges Bank, the
Central Bank of Norway, has categorically stated that it will shun lending to
companies with “heavy investments on coal-fired power projects”, including
Philippine developers.
In the first exclusion
list that the Norwegian central bank came up with, it singled out Aboitiz Power
Corporation among those that it will not be opening its credit window to.
AboitizPower is known
in the Norwegian energy scene, primarily because of its tie-up with SN Power of
Norway – but that is mainly for hydropower projects.
The Norwegian lending
institution has named several companies globally that it deemed not ideal for
its fund portfolio because of their coal plant investments. The others are
those from China, India, Japan, Chile, Canada, HongKong, Australia, United
Kingdom, South Africa, Poland, Greece and the United States.
In a media statement,
Norges Bank said it “decided to exclude 52 companies from the Government
Pension Fund Global after an assessment of the product-based coal criterion.”
It explained that “the
exclusions follow a first round of analysis by Norges Bank Investment
Management.” Additions in the list are expected this year.
The bank has emphasized
that “where thermal coal is a significant part of a company’s business
activities, the company may be excluded from the fund.”
The lending criterion
set for the fund, it was further noted, generally steer clear of coal power
companies and mining firms, of which at least 30 percent of their business
activities or at least 30 percent of their revenues are derived from coal-based
generation.
Meanwhile, AboitizPower
indicated that Norges Bank Investment Management (NBIM) already divested all of
its holdings in their company first quarter this year. “There was no impact on
company performance or share price at the time,” it said.
AboitizPower invested
in various coal-fired power generation facilities to help meet the country’s
need for baseload capacity. It is now sorting out forward developments to
balance that via follow-through investments in renewable energy.
By far, Norges Bank has
stipulated that “in the process of considering recommendations for exclusion or
observation of companies that breach the thresholds, emphasis should also be
given to the forward looking product/fuel mix transition as well as the degree
to which the company utilizes renewable energy in its activities.”
With fuel mix changes,
it noted that the energy production of the excluded companies may eventually be
re-assessed.
At that time, if the
covered companies would still have at least 30-percent of their base generation
fueled by coal, they could still be part of the “exclusion criterion.”
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