This archive report was first published on 13 November 2019.
The African Development Bank (AfDB) has ruled out funding a coal-fired power plant project in Kenya, citing environmental concerns. The decision was made by senior AfDB officials, who told Reuters in November 2019 that the bank had no plans to finance new coal plants in the future.
The project, which was planned near a UNESCO World Heritage Site in Lamu, eastern Kenya, was backed by Kenyan and Chinese investors. Construction was originally set to start in 2015, but the project was halted by a local environmental tribunal.
Dozens of top banks, insurers, and development finance institutions are restricting coal investments, as climate activists and investors voice growing concerns about the impact of burning fossil fuels, particularly coal. AfDB President Akinwumi Adesina told Reuters that the bank took environmental concerns seriously and was focusing on renewable energy.
Wale Shonibare, AfDB's acting vice president for energy, said the bank 'did not move forward with the Lamu Coal transaction and had no plans to do so in the future'. The AfDB's retreat from coal will make it harder for the Lamu project to progress.
The AfDB has been a major funder of coal projects in Africa, lending over 1.5 billion euros to South African utility Eskom for its Medupi coal plant and over 50 million euros for the Sendou coal plant in Senegal. However, the bank still plans to finance flue gas desulphurisation units at Medupi to mitigate sulphur emissions produced by burning coal.
