Japan uses climate cash to build coal plants in India, Bangladesh

25 March 2015 (Associated Press) – Despite mounting protests, Japan continues to finance the building of coal-fired power plants with money earmarked for fighting climate change, with two new projects underway in India and Bangladesh, The Associated Press has found. Japan had counted $1 billion in loans for coal plants in Indonesia as climate finance, angering critics who say such financing should be going to clean energy like solar and wind power. Japanese officials now say they are also counting $630 million in loans for coal plants in Kudgi, India, and Matarbari, Bangladesh, as climate finance. The Kudgi project has been marred by violent clashes between police and local farmers who fear the plant will pollute the environment. Tokyo argues that the projects are climate-friendly because the plants use technology that burns coal more efficiently, reducing their carbon emissions compared to older coal plants. Also, Japanese officials stress that developing countries need coal power to grow their economies and expand access to electricity. “Japan is of the view that the promotion of high-efficiency coal-fired power plants is one of the realistic, pragmatic and effective approaches to cope with the issue of climate change,” said Takako Ito, a spokeswoman for the Foreign Ministry. Climate finance is money promised by rich countries in U.N. climate talks to help poor countries limit their carbon emissions. Japan announced at a U.N. climate conference in Peru in December that it has provided $16 billion in climate finance since 2013. Yet the U.N. has no rules defining climate finance, meaning governments decide for themselves what projects to include in their accounting. Environmental activists are demanding that at the very least, climate finance should exclude coal and other fossil fuels that scientists blame for warming the planet. […] Climate activists are now urging the recently created Green Climate Fund, which is supposed to become a key channel of climate finance, to explicitly ban funding for fossil fuel projects. The issue is likely to be discussed at the GCF’s board meeting this week in South Korea. The Matarbari plant is financed with a Japanese development loan agreed with the government of Bangladesh last June. The Kudgi project is partially financed by the Japan Bank for International Cooperation, which supports Japanese companies abroad through export credits. [more]