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September 25, 2014

Japan Draws Condemnation For Continued Overseas Coal Financing

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Photo courtesy of Greenpeace India

The world’s largest public financier of overseas coal-fired power plants is facing serious pressure to move beyond coal.

Earlier this month, four residents of the central Java district of Batang, Indonesia were in Tokyo to protest the Japanese government’s support for a proposed $4 billion coal-fired power plant slated to be built in Batang. Since it’s inception in 2011, the Japanese Bank for International Cooperation (JBIC)-funded coal project has been subject to fierce local resistance. Residents refusing to sell their land have already delayed the start of construction for over two years, but, in turn, activists have faced harassment and arrests over their efforts to protect their land.

Yet, the community members refuse to give up their fight, concerned that pollution from the coal-fired power plant will negatively affect fertile agricultural land and fragile coastal fishing zones which support the livelihoods of many local villagers. Locals are also worried about the health effects of pollutants contaminating the area’s air and water.

The 2,000-megawatt plant is poised to be the largest coal-fired power plant in Southeast Asia at an estimated cost of 400 billion yen (U.S. $4 billion). Riodi and Taryun, two of the Batang natives who traveled to Japan, were delegated by local Japanese residents to meet with officials from JBIC.

“We want to express our refusal directly to the responsible parties: Japan’s Ministry of Finance and the key companies, Itochu and J Power,” said Riodi in Tokyo last Tuesday. “After fruitless attempts in Central Java, and in the capital Jakarta, we hope our journey to Japan can ensure the cancellation of the power plant construction in our villages”.

Thanks to their efforts, parliamentarians from two Japanese opposition parties -- Mizuho Fukushima, an ex-minister who lead the Social Democratic Party from 2003-2013, and Naoto Sakaguchi, director-general of the international department of the Restoration Party of Japan -- have lent their support to the Indonesian community representatives.

Securing opposition to this coal project in Japan will be a major victory considering JBIC is the world’s leading financier of coal and Japan has provided more international funding to coal than any other country. Clearly, getting the Japanese government out of the dirty coal business is no small task, but these activists are not alone.

A new norm amongst the international community has solidified over the past year: a swift and sweeping transition away from financing new coal-fired plants overseas by many OECD countries -- including the United States, United Kingdom, Netherlands, and other Nordic countries. Each of these countries have established strict restrictions for the support for overseas coal-fired power plants. In fact, just this week at the UN Climate Summit, the German government announced plans to offer its own restrictions for overseas coal financing.

In addition, these countries’ large international financial institutions (IFIs) -- like the World Bank Group -- have enacted similar coal financing policies.

However, it seems as though the World Bank -- which is still pondering its test case of these coal financing policies in Kosovo -- is actively defying its own coal ban by participating in this Japanese coal project. The World Bank’s International Finance Corporation (IFC) helped create the Indonesia Infrastructure Guarantee Fund. This fund has provided a $33.9 billion guarantee for the Batang coal-fired power plant. Furthermore, the World Bank’s infrastructure project in Indonesia includes policies to subsidize and promote over 40 coal projects worldwide.

With the world’s nations committed to limiting climate disruption and keeping a global temperature rise below 2 degrees Celsius, Japan and JBIC do not have the luxury of continued investment in burning or extracting dirty coal.

The health of our climate and our communities is at stake. It’s time for Japan to join the international community. It’s time to move beyond coal.

-- Rohan Bhatia, International Climate Program Intern

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