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Banks go for green lending

Banks go for green lending

(12 February 2008 – USA) Three US investment banks have introduced lending guidelines that could make it harder for coal-fired power plants to access finance. The ‘carbon principles’, adopted by Citigroup, JPMorgan Chase and Morgan Stanley also encourage lending for renewable energy plants.

The guidelines, constructed in combination with lawyers, environmental groups and some of America’s largest operators of coal-fired plants, require the three investment banks to go through a rigorous due diligence process before lending money to energy plants.

Dale Bryk, senior lawyer at the Natural Resources Defence Council, which worked with the banks to draft the principles, commented that banks are now indicating that there are increased risks involved in investing in new coal plants.

The process requires borrowers to submit details on how they plan to offset their carbon emissions from the plants, account for future costs of anticipated greenhouse gas emission regulations, and implement energy efficiency and renewable energy programs.

This push for sustainable business lending still gives coal based energy a role to play in America’s energy mix, however in a more sustainable capacity.
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