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Standard Bank Group, the South Africa-based lender with the biggest assets in Africa, says that access to energy in Africa will continue to drive its support for fossil fuel projects.
“It is not possible for Africa and many of the African countries to ignore the shortage of electricity supply,” Kenny Fihla, chief executive officer of Standard’s corporate and investment banking unit, has said in a recent interview with Bloomberg.
“Today’s challenges are not going to be resolved overnight and therefore a much more balanced approach is required.”
Standard Bank has been criticized by South Africa-based shareholder activist group Just Share for having raised its exposure to fossil fuels in the past year.
Last month, Just Share said in an analysis of Standard Bank Group’s 2022 climate report that the bank’s on- and off-balance sheet exposure to fossil fuels jumped by 22% from 2021 to 2022. Total exposure to fossil fuel power generation, coal mining, and oil and gas (integrated, trading & retail, exploration and production, and midstream) was $6.5 billion (119.4 billion South African rand) in 2022. Standard Bank’s exposure to renewables jumped by a much larger percentage, 84%, but the bank’s exposure to fossil fuels is around 4.5 times higher, Just Share said.
“There is no justifiable basis to argue that significant and extended new fossil fuel investment is required for Africa’s development. On the contrary, there is significant evidence that increasing Africa’s exposure to fossil fuels would have severely negative impacts,” the shareholder activist group said.
Major banks all over the world have faced increased pressure to cut financing for fossil fuel projects.
Fossil fuel financing from the world’s 60 largest banks hit $673 billion in 2022. These banks have funded $5.5 trillion in fossil fuels projects in the seven years since the adoption of the Paris Agreement, according to the annual Banking on Climate Chaos report by environmental groups published last month.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.