An environmentalist group has applauded the Export Import Bank of the United States for its decision to not to finance Reliance's coal-fired power plant in Sasan in Madhya Pradesh on the grounds that it would emit too much carbon dioxide, thus detrimental to the environment.
"This is an extremely important precedent because it's the first time the US Ex-Im Bank has declined the financing of a project that is harmful to the climate," said Doug Norlen, Policy Director for Pacific Environment.
"We applaud Ex-Im Bank's correct decision-making," Norlen said in a statement yesterday.
A San Francisco-based non-profit organisation, Pacific Environment's Responsible Finance Program holds public banks such as the US Export-Import Bank accountable to taxpayers, project-impacted communities and the environment.
The group issued statement after the businesses and local politicians in Wisconsin asked President Barack Obama and Ex-Im Bank to reverse its decision, with regard to not approve the financing the project as it would result in hitting as many as 1,000 jobs in the US.
The 3,960 megawatt (MW) Sasan coal power and mine is one of the 9 earmarked 'ultra-mega' coal-fired power stations proposed by the Indian government as an effort to reach specific energy capacity goals by 2017.
The project would release vast amounts of pollution into the local environment and the global atmosphere. The annual greenhouse gas emissions from this project alone would nearly triple the total annual emissions of all fossil fuel projects approved by Ex-Im Bank in 2009, the statement said.
"We have been long concerned that Ex-Im Bank's fossil fuel financing has been skyrocketing, and support for Sasan would have sent those emissions off the charts," said Norlen, adding we hope the decision on Sasan marks a pivotal point for Ex-Im Bank as they avert future involvement with harmful fossil fuel projects.
Ex-Im Bank's decision to decline support for Sasan brings the federal government export credit agency more in line with the rest of the Obama Administration's efforts to reduce fossil fuel subsidies and expand support for renewable energy and energy efficiency, the NGO said.
Noting that in 2009 Ex-Im Bank financing for renewable energy was less than 4 per cent of the public agency's financing for fossil fuel projects, the NGO said the Obama Administration's decision follows commitments by G-20 countries, re-affirmed at recent meetings in Canada, to phase out fossil fuel subsidies.