DBS, OCBC among lenders for Vietnam coal power plant
DBS Bank and OCBC Bank are among a group of banks and lending agencies that have signed off on financing of about US$1.87 billion ($2.45 billion) for a controversial coal-fired power station in Vietnam.
The 1,200 megawatt Nghi Son 2 power station in Tinh Gia district, Thanh Hoa province, is one of a number of large coal-fired power plants planned to meet Vietnam's energy needs.
But green groups, the International Energy Agency and the World Bank fear such big coal projects will exacerbate climate change by locking in years of polluting emissions. Burning coal is a major source of local air pollution and carbon emissions blamed for heating up the planet.
Environmental groups have put pressure on DBS, OCBC and United Overseas Bank as they are major funders of coal projects in the region. The groups also say regional governments should focus investments on increasingly cheaper renewable energy.
The Singapore banks, however, say coal financing is meeting an investment need.
They believe that a rapid switch to renewable energy is not feasible for now, though they also say they aim to progressively encourage customers to take a greener path.
For the power station in Vietnam, Japan's Marubeni and Korea Electric Power secured the US$1.87 billion from the financing consortium, according to Thomson Reuters Project Finance International.
The loan was signed last Friday with export credit agencies Japan Bank for International Cooperation and Export-Import Bank of Korea; Japanese banks Sumitomo Mitsui Banking Corp, MUFG, Mizuho and Shinsei Bank; DBS and OCBC; and Maybank of Malaysia.
Green groups in Japan, South Korea and Vietnam have launched petitions to halt the project.
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