MUFG to stop funding coal projects as it supports renewables

15 May 2019 - 12:00 am UTC

Japan’s Mitsubishi UFJ Financial Group (MUFG) announced a focus on clean energy and infrastructure projects, saying it will stop giving loans to new coal-fired power generation projects from July 1.

The company will also aim to provide JPY 20trn (USD 182bn) financing for renewable energy and other projects.

Outstanding loans already provided to coal-fired power projects will decline gradually, the company said in a statement today. An MUFG spokesperson declined to give details on the exposure the banking group has to coal-fired projects.    

“We will take a cautious approach to projects regarding which financial assessment has been ongoing since before the revision,” the banking group said.  

It will add forestry, palm oil and coal mine development to its “restricted transactions” that need extra attention.

MUFG said it has set sustainable finance goals and that it aims to provide the JPY 20trn in financing on a cumulative basis – including JPY 8trn for environmental areas – between the 2019 and 2030 fiscal years.  

MUFG said the term sustainable finance will take the form of loans, equity investment in funds, arrangement of project finance and syndicated loans, stocks and bond underwriting and financial advisory services to what the banking groups calls environmental area and social area.    

The environmental area refers to businesses potentially contributing to mitigate climate change including renewable power businesses, while the social area includes fundamental infrastructure services such as public transport, waterworks, airports, hospitals and schools.    

 

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