Biggest China Bank Walks Away From $3 Billion Zimbabwe Coal Plan

In a two-decade effort to develop the project, China’s largest bank has abandoned plans to finance a $3 billion coal-fired power plant in Zimbabwe, according to a coalition of 32 environmental groups.

The Industrial and Commercial Bank of China Ltd told Go Clean ICBC, which includes environmental activist group 350.org, that it would not fund the 2,800-MW Sengwa coal project, which RioEnergy Ltd., RioZim Ltd. A unit of . Developed in northern Zimbabwe.

Last year RioEnergy chairman Caleb Dengue said that ICBC had signed a formal notice of interest in funding the plant, which would be constructed by China Gezhouba Group, while the related transmission lines were owned by Power Construction Corp. of China Ltd. will be created by The withdrawal will be the second blow to the bank’s coal financing plans after the government last year revoked permission to build a coal-fired plant in Lamu, Kenya.

“ICBC also confirmed that they will not fund the Lamu Coal Project in Kenya as well as the Sengwa Coal Project in Zimbabwe,” Go Klein ICBC said in an email dated June 18 to 350.org to Businesshala at 350.org said in.

The decision further narrows the funding options available to developers of coal projects in Africa as West and South African banks have come under pressure from their shareholders not to fund development that could contribute to climate change. While the ICBC confirmed having received a query from Businesshala, it did not immediately respond.

Go Clean ICBC said in an email that the Chinese lender is investigating the environmental impact of funding coal projects and is in discussions with the coalition to “draw a clear road map to stop coal financing”. Natalia Clark, associate director of Global Communications at 350.org, declined to provide further details.

The coalition last week planned to launch a global campaign against the lender’s coal activity, which was suspended because of ongoing dialogue.

Rio Energy is looking for alternative financiers, a person with direct knowledge of the matter said, asking not to be identified because the withdrawal of ICBC has not been formally announced. RioEnergy general manager Simba Mhuriro said he was not aware of the matter and could not comment. RioZim spokesman Wilson Guatieringa declined to comment.

Sengwa was initially owned by the London-based miner Rio Tinto Group, which was once the parent of Riozyme Ltd. It was set aside as Zimbabwe’s relations with Britain were its former colonists. After the project was revived in 2016, General Electric Company and a unit of Blackstone Group LP did not conduct preliminary inquiries.

ICBC’s support was seen as a new beginning in RioEnergy’s plan to develop the plant in Zimbabwe and end frequent power outages.