Images : NAB
National Australia Bank announced yesterday funding for new thermal coal mining projects was now off the table and a Low Carbon Shared Portfolio, a new way for institutional investors to back renewable energy projects.
In announcing its stance on coal, the company said it realised it had important role to play in the orderly transition to a low carbon economy.
“While we will continue to support our existing customers across the mining and energy sectors, including those with existing coal assets, NAB will no longer finance new thermal coal mining projects,” said part of a brief statement made by the bank.
NAB was the first of Australia’s “Big 4” banks to rule out funding Adani’s Carmichael coal mine project in Queensland’s Galilee Basin – even before Adani had the opportunity to turn up cap-in-hand.
On a related note, Adani’s project is continuing to struggle in finding financing. Earlier this week, we reported Queensland Premier Annastacia Palaszczuk has officially vetoed a $1 billion concessional loan to Adani for the Northern Galilee Basin Rail Project.
Low Carbon Shared Portfolio
While turning its back on new thermal coal, NAB is very upbeat about renewables.
“We have seen tremendous growth in clean energy across our loan book and our customers are continually telling us that they want more ways to get involved in the market,” said Chief Customer Officer, Corporate & Institutional Banking, Mike Baird said.
The bank also announced the NAB Low Carbon Shared Portfolio yesterday, a closed-end offering that provides institutional investors access to a portfolio of loans to companies formed and registered in Australia that are operating renewable energy projects, including wind and solar power facilities. These are projects that were previously unavailable through the public debt market
According to NAB, it has arranged AUD $6.2 billion in renewable energy project finance in the last 14 years. During FY17, NAB inked deals totalling more than AUD $16 billion in renewables project value.
NAB’s 2017 Sustainability Report (PDF) states that by the end of September, the company’s global portfolio of renewable energy projects represented a total generation capacity of 6,561 MW.
Among the Australian projects, NAB is providing project finance for the first two stages of the Bungala Solar Farm, located north-east of Port Augusta in South Australia. When complete, the huge facility will boast 300MW capacity.
With regard to its own use of renewable energy, the bank has set a goal of sourcing 50% of its Australian electricity consumption from renewable projects by 2025, including on-site solar power generation. As at 30 September, NAB had 1,345 kW of installed solar capacity across 38 of its buildings.
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Well done NAB