Applied to Government and All Public Institutions…Comprehensive Coverage Including ODA, Export Finance, Investment
Principled Suspension of New Projects…Future Application of International Agreements
[Sejong=Asia Economy Reporter Kim Hyunjung] The government will completely suspend public financial support for overseas coal power projects starting from the 1st of next month. It also plans to guide some private institutions in which the government holds shares to stop support.
On the 24th, the government announced the "New Overseas Coal Power Public Financial Support Guidelines" jointly with related ministries. This is a follow-up measure to President Moon Jae-in's declaration at the Climate Summit in April to halt public financial support for new overseas coal-fired power plants, prepared through working-level consultations among related ministries from May to July. The guidelines aim to specify the intent of the public financial support suspension declaration while also reflecting industry opinions and trends in related international organization discussions to reduce confusion on the ground.
The "public financial support" mentioned in the guidelines is a comprehensive concept covering official development assistance (ODA), export finance, investment, etc., conducted by the government, local governments, and public institutions, and will be applied to all public institutions starting October 1.
Accordingly, public financial support for newly initiated overseas coal power projects and facilities will be suspended, but additional matters such as maintenance and repair of coal power facilities and the application of carbon capture, utilization, and storage (CCUS) technology will be subject to future international agreement contents. Currently, a revised OECD coal understanding proposal containing specific support principles and exceptions on these matters has been submitted and is under discussion.
However, considering economic and diplomatic trust relationships with partner countries and project progress, support for already approved projects such as Indonesia Java Units 9 and 10 and Vietnam Vung Ang 2 will be allowed. Essential ancillary transactions accompanying financial agreements, such as performance guarantees, swaps, and issuance of letters of credit, are also supported.
Private institutions may also be affected by these guidelines in the mid to long term. The government plans to guide private institutions in which it holds shares and participates in decision-making such as board meetings to suspend financial support for new overseas coal power projects.
A government official said, "We will prevent confusion on the ground through distribution and promotion of the guidelines," adding, "We expect to clearly convey policy signals to domestic companies and actively contribute to the globally expanding discussions on halting coal power investments."
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