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November 14, 2018

Standard Bank says not funding Lamu Coal

Residents ride a motorbike past the proposed site of East Africa’s first coal plant in Kwasasi village, near the coastal town of Lamu, Kenya December 9, 2016.Photo/Nobert Allan
Residents ride a motorbike past the proposed site of East Africa’s first coal plant in Kwasasi village, near the coastal town of Lamu, Kenya December 9, 2016.Photo/Nobert Allan

South Africa's Standard Bank have clarified that they are not part of the financiers of the Sh210 billion Lamu coal plant.

Nigel Beck, the head of environmental and social advisory at Standard Bank said they reviewed the opportunity to fund the controversial plant, but for “various reasons”, decided against it. The project is being financed by the Industrial and Commercial Bank of China Ltd.

This was confirmed by the project manager of the Centum-owned initiative Francis Njogu, who explained that Standard Bank only played the role of a mandated lead arranger, and not the project financier.

"The mandated lead arranger facilitates or leads a group of investors to finance a project and we completed that process in 2015," Njogu told the Star.

He played down suggestions by a section of environmentalists that the bank had pulled out of the project.

Several conservation groups had praised the bank for this "wise decision".

“This is a wise decision on behalf of Standard Bank,” said Glen Tyler, head of the 350 South Africa, an environment lobby opposed to the plant.

The proposed plant was designed to process low-grade coal imported from South Africa.

Unesco also opposes the coal plant saying it was likely to destroy the world heritage site.

Save Lamu, a local NGO that sued the National Environmental Management Authority to stop the project, also praised the bank.

National Coordinator Omar Elmawi termed it as good news for the Lamu people.

“The fact that a major African bank refuses to fund this deadly plant sends a strong anti-coal message amidst financiers increasing unease when funding coal globally. Any investment in coal is a disaster for the planet. Financiers are aware of the poor financial return of these projects, especially in comparison to renewable energy projects.” he said.

Omar also runs the deCOALonize Kenya campaign.

In June, one witness at the Environment Tribunal said the plant could kill at least 1,600 people through dangerous pollutants and leave thousands more with life-threatening illnesses.

“If the plant is operated for 40 years, it will be responsible for 1,600 premature deaths through exposure of the population to toxins,” said Lauri Myllyvirta, an expert on air quality standards with environment lobby Greenpeace.

Lauri said the acidic gases emitted will cause acid rain and acid deposit in water, which can harm crops and the ecosystem.

 

 

 

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