Fossil fuel exclusion policies

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Paris alignmentReasoning
UnalignedCDB has no oil or gas exclusions and there are examples of CDB loans for coal, oil extraction and gas projects.
 Alignment and reasoning
Coal policiesCDB, as part of the International Development Finance club has committed to end international finance for “new unabated coal power generation”. It is unclear whether this will include associated infrastructure, such as mining or have any impact on the domestic lending of China Development Bank. 
Upstream oil and gas policiesNo upstream oil and gas exclusion.
Downstream oil and gas policies No downstream oil and gas exclusion.
Supply-side energy efficiency Not applicable.

Explanation

There is a lack of public information on the China Development Bank (CDB) and its fossil fuel project lending policies; however, the evidence shows that there are no blanket fossil fuel exclusion policies in place.

A statement by President Xi states China will not “build new coal-fired power projects abroad”. A press release issued at COP26 by the International Development Finance Club (CDB is a member) states that it “commits to end international public finance for new unabated coal power generation, implementing the decision made by the G20 Leaders in Rome”. It is unclear whether this will include associated infrastructure, such as mining.

It is unclear if this will have any impact on the domestic lending of China Development Bank. 

CDB has funded a number of coal power plants. According to available databases, these include the Port Qasim and Hub coal plants in Bangladesh and the Medupi and Kusile coal power stations in South Africa. The Bank has also supported gas and oil Investments at various stages of the value chain.

Within its green bonds, the China Development Bank has excluded “clean coal and fossil fuel related technologies”.

It should be noted that other state-owned enterprises, such as the China Development and Investment Group, have already announced a complete exit from coal business.

E3G understands that CDB has a work plan on the full implementation of ultra-low emissions and energy saving reconstruction/refurbishment of coal-fired power plants. These projects get preferential credit terms

Recommendation: A commitment to end all coal finance would signal the bank is taking steps to align its financing activities with President Xi Jinping’s high-profile pledge that the Belt-and-Road Initiative would be “open, green and clean”, made at the second Belt and Road Forum in Beijing in April 2019.

Last Update: November 2021