Commercial banks

Due to the unfavourable investment climate in south east Europe, most large-scale infrastructure projects need financing from public development banks, and commercial banks tend to see their participation as giving a signal that it is ‘safe’ for them to co-finance projects. However this is not necessarily the case in Turkey, where there is more involvement of commercial banks in infrastructure construction. Finding out which commercial banks are involved in a project can be very difficult, especially at an early stage before contracts are signed. Therefore we recommend contacting Banktrack, a network which is specialised in tracking and campaigning against commercial banks’ financing harmful projects. Banktrack may be able help establish which banks are planning to be involved and to how to prevent them from participating.

POLICIES

There are hundreds of commercial banks operating in southeast Europe and Turkey, so it is impossible to give an overview of their policies. Nevertheless there is a global standard for commercial banks called the Equator Principles which, at the time of writing, 79 banks have committed to follow and can be used as some kind of a standard by which to measure banks’ performance. The Equator Principles apply to project finance only (ie. when banks directly finance an infrastructure project), not for general corporate loans.

In addition, some banks have gone further when it comes to climate commitments. Banktrack has compiled some best practices of banks relating to climate, incuding coal investments. For the coal power sector, the most stringent policy to date is HSBC’s 2011 energy policy, which includes something called an Emissions Performance Standard (EPS) for power plants of 550g CO2/kWh. Coal plants today cannot meet this level, so this amounts to a commitment not to invest in coal plants. However, this only applies to developed countries. For developing countries, an EPS of 850g CO2/kWh applies. These standards are similar to the thermal efficiency thresholds adopted by other banks like BNP Paribas and Société Générale, of 43% and 38% respectively. 43% would be enough to prevent BNP Paribas financing any of the planned coal plants currently planned in the Western Balkan countries today and 38% would prevent financing for some of them, for example the Stanari plant in Bosnia and Herzegovina is expected to have a net efficiency level of 34.1%.

 

CONTACTS

Yann Louvel: yann@banktrack.org

Banktrack

 

CASE STUDIES

Tufanbeyli lignite plant, Turkey

This 450 MW lignite plant is raising concerns among local people who will lose their land and be subjected to cumulative impacts of dust pollution from several sources. It is also technologically unimpressive, with an efficiency level of just 34 percent (net) compared to Best Available Techniques of over 40 percent.

Read the case study »