Public Finance and Environment

Press Release: International petition (61 groups from 23 countries endorsed)
JBIC should revoke the finance for Nghi Son 2 coal fired power plant immediately!

>Japanese

Press Release

　61 Groups from 23 countries demanded that Japan Bank for International Cooperation (hereafter, JBIC), Japanese export credit agency, revoke the finance for Nghi Son 2 coal fired power plant (constructing 2 units of 600 MW supercritical coal fired power plants in Nghi Son, Thanh Hoa Province)

　Since the Paris Agreement was made in 2015, de-carbonization, especially the phase out from coal is proceeding at an accelerated pace to meet the Paris 1.5-2 degree temperature target. Japan as a signatory to Paris Agreement should change the course immediately. At the very least, the Japanese Government has stated that they “only support ultrasuper critical (USC) technology, the world most advanced technology”. Thus, financing Nghi Son 2 is clearly against Japan’s own policy.

NGOs also have pointed out that JBIC did not disclose the EIA properly. Their own “Guidelines” states “JBIC discloses information in principle as set out below, depending on the nature of the project. Such disclosure is made, in principle, on JBIC’s website as soon as it obtains the information.” However, they disclosed the EIA more than six months after they received the EIA. The process of financing decision was also problematic.

Please see our petition for detail.
> Petition with full list of signatories



Mr. Shinzo Abe, Prime Minister of Japan
Mr. Taro Aso, Minister of FInance
Mr. Akira Kondoh, Governor of Japan Bank for International Cooperation



　We, the undersigned 61 organizations from 23 countries demand that the Japan Bank for International Cooperation (hereafter, JBIC) revoke the finance for Nghi Son 2 Coal fired power plant project in Vietnam(1).


1. It is against Paris Agreement

Adopted in 2015, Paris Agreement set a long-term goal of keeping the increase in global average temperature to well below 2°C above pre-industrial levels, and to pursue efforts to limit the temperature increase to 1.5°C. The Agreement came into force in 2016 and was ratified by the Japanese government. Catastrophic climate impact is already being felt especially in developing countries and drastic cut of greenhouse gas emission is necessary. UN Environmental Programme has reported that any new build of coal fired power plant is incompatible with Paris Agreement Goal(2).

2. Supporting supercritical technology is against Japanese Government policy

In January 2018, the Japanese Government set a policy “to support only ultra-super critical technology, a world-wide most advanced technology, taking into account OECD rules and recipient country’s energy policy and climate change policy”(3).

However, the said project uses sub-standard supercritical technology, which is therefore against Japan’s own policy.

JBIC insisted and confirmed that the EIA for the project was approved by the Vietnamese government in 2015, which meets the requirement of “the transitional arrangement of OECD coal sector understanding. (4)”

However, JBIC received the EIA for the project on 16th June 2017. OECD rules require “a request for proposals was issued prior to 1 January 2017, on the basis of a fully completed technical feasibility study and environmental and social impact assessment, and provided that an application for export credit support for any such project is submitted and acted upon expeditiously.” Therefore, the loan request was not properly processed according to OECD rules. As such, financing the project is against Japanese government policy which requires that JBIC finance takes into account OECD rules.

3. An additional impact assessment should be completed and disclosed　

JBIC refers to the EIA which was completed in February 2015 and was approved on 4th March 2015. This EIA presently does not take into account the cumulative impacts of the other projects in the area, such as Nghi Son Oil refinery.

According to JBIC, there are such studies conducted by the operator. However, JBIC has claimed that these studies are not to be disclosed to the public.

JBIC’s own Guidelines state that “In addition to the direct and immediate impact of projects, derivative, secondary, and cumulative impact and impact of associated facilities are also to be examined and investigated to a reasonable extent.” Therefore, the said studies conducted by the operator should be included in the EIA and thus disclosed. Also, the EIA itself should be repeated as it was conducted almost 3 years ago.

4. Timing of disclosure of the EIA and the Approval of EIA was not proper

According to JBIC, JBIC received the EIA and confirmation of its approval from the applicant on 16th June 2017 and 12th May 2017 respectively (5). JBIC’s guideline states “JBIC discloses information in principle as set out below, depending on the nature of the project. Such disclosure is made, in principle, on JBIC’s website as soon as it obtains the information.”

However, JBIC only disclosed the EIA on 6th February 2018. It is a clear violation of the guidelines that the EIA and Approval of the EIA had not been disclosed for more than half a year since JBIC received them. JBIC should explain why the disclosure was delayed for such long time.

5. Air pollution and potential in renewable energy development in Vietnam

In Vietnam, serious air pollution has been reported and attributed to coal fired power plants(6) . Scientific reports concluded correlation between premature death due to air pollution, and it is estimated that by 2030, Vietnam will be the one of the most polluted country in ASEAN and the premature death rate due to air pollution is estimated to reach approximately 20,000 in 2030 per year(7) .

At the same time, development of renewable energy in Vietnam is accelerated in these days. According to “Vietnam Energy Outlook 2017” which was conducted by The Ministry of Industry and Trade (MOIT) of Vietnam in collaboration with the Danish Energy Agency (DEA), there is the potential to generate up to 40 GW of electricity from solar sources, 12 GW from wind power, and 3.7 GW from biomass by 2035 (8). In Bac Lieu, a coal fired power plant project on which Japan International Cooperation Agency conducted a preparatory study was scraped due to the air pollution concerns and switched to wind power development(9) .

It is necessary to secure energy access as part of human rights and for life, however, energy development must take into account the people’s voice, environmental impacts, climate change and sustainability.

We have demanded that JBIC not finance Nghi Son 2 due to above mentioned reasons. Despite this, JBIC proceeded with signing the loan agreement, and did not feel that it needs to be accountable to concerns raised by civil society and its own guidelines.

We reiterate our demand that JBIC should cancel the finance for Nghi Son 2 coal fired power plant immediately.

Notes:
1. JBIC “Project Finance and Political Risk Guarantee for Nghi Son 2 Coal-Fired Power Generation Project in the Republic of Vietnam” 13th April 2018, https://www.jbic.go.jp/en/information/press/press-2018/0413-010921.html
2. UN Environmental Programme” The Emissions Gap Report 2017 A UN Environment Synthesis Report” https://wedocs.unep.org/bitstream/handle/20.500.11822/22070/EGR_2017.pdf
3. Minutes of briefing by Environmental Minister, 30th January 2018,https://www.env.go.jp/annai/kaiken/h30/0130.html
4. OECD, “Sector Understanding On Export Credits For Coal-Fired Electricity Generation Projects”, 2015/11/27
5. Telephone interview by FoE Japan to JBIC, 6th April 2018
6. “Hanoi air is unsafe most of the time, coal plants blamed” VN Express, 9th Sep 2017https://e.vnexpress.net/news/news/hanoi-air-is-unsafe-most-of-the-time-coal-plants-blamed-3638973.html
7. S. Koplitz et. “Burden of Disease from Rising Coal-Fired Power Plant Emissions in Southeast Asia”, Environ. Sci. Technol. 2017, 51, 1467−1476 https://pubs.acs.org/doi/pdf/10.1021/acs.est.6b03731
8. “MoIT & Danish energy ministry release Vietnam Energy Outlook Report” Vietnam Economic Times, 21st Sep 2017, https://vneconomictimes.com/article/vietnam-today/moit-danish-energy-ministry-release-vietnam-energy-outlook-report
9. “Vietnam province scraps coal plant over environmental concerns”, VN Express, 26th Sep 2016, https://e.vnexpress.net/news/news/vietnam-province-scraps-coal-plant-over-environmental-concerns-3476051.html