Current and potential international investors in Korea Electric Power Corporation (KEPCO) have urged the company to reconsider its plans to finance new overseas coal-fired power plants.
The international investors, who have a combined $US5.86 trillion (₩7,178 trillion) in assets under management, have expressed concern that KEPCO’s coal financing plans would counteract the company’s early progress on the low-carbon energy transition and international efforts to mitigate climate change. Four of the international investors also form the core engagement team for KEPCO as part of Climate Action 100+.
KEPCO is considering financing the following new coal plants; Vung Ang 2 in Vietnam; Jawa 9 and 10 in Indonesia; and Sual (Pangasinan) in the Philippines. The investor statement comes ahead of KEPCO’s general shareholder’s meeting on Friday. KEPCO’s Board of Directors are expected to consider its position on finance for some of the above Asian coal projects in April.
The investors warned that Korean companies like KEPCO are at risk if they continue to pursue new coal power projects because carbon emissions are increasingly being considered as a competitiveness factor in global markets. A growing number of international financiers are also moving away from thermal coal power investments because of their genuine efforts to combat climate change and growing forecasts showing these projects to be economically unviable.
The investors also recognised the important role played by the South Korean Government, the majority shareholder in KEPCO, in domestic and overseas coal-fired power investment decisions. They note South Korea is party to the Paris Agreement, which aims to hold the increase in global average temperature to well below 2°C above pre‑industrial levels and pursue efforts to limit the temperature increase to 1.5°C, and such investments hinder efforts to achieve these ambitions.