South Africa's largest bank to stop funding new coal-fired power stations

Africa s largest bank by market value is halting funding of new coal-fired power stations immediately and will begin the financing of new projects to mine the fuel in the next five years.

The Johannesburg-based lender joins its peer Nedbank Group Ltd. in making such commitments as pressure mounts on banks to shun fossil fuel lending from investors and activists. While South Africa s largest banks are reducing their exposure to activities that pollute the environment, they have set different time-lines to take into account the nation s dependence on coal.

It is the long-term ambition of FirstRand to be net zero by 2050, it said in its updated policy published on Wednesday. The bank will also reduce its short - and medium-term limits on coal exposure, it said.

South Africa relies on coal for almost all its electricity and exports the fuel to countries such as India and China. Its carbon emissions rival those of the United Kingdom and is eight times its size.

Other South African banks such as Investec Ltd. and Standard Bank Group Ltd. are also pursuing plans to encourage clients to opt for greener technologies.

FirstRand, owner of the retail lender FNB and Rand Merchant Bank, sees its transition path assuming a gradual reduction in coal production and ending usage from 2025 to 2030 as Eskom Holdings SOC Ltd. decommission five coal power stations and as global demand for export of the fuel declines, it said.

The pathway assumes the end of coal as the core energy source in South Africa between 2042 and 2049, it said.