Sustainable finance

Our stories

Geothermal Power

What is Geothermal Power?

Geothermal power is a clean, sustainable energy source created from heat that has been stored deep within the earths surface. Geothermal is a natural, renewable source of energy that does not produce pollution, and does not emit CO2.

What is Wayang Windu?

Wayang Windu is one of the biggest geothermal power plants in Indonesia, including the World’s largest geothermal turbine at 114MW. Wayang Windu presently comprises two turbines or ‘units’,with two more planned for development in 2010.

Indonesia has the greatest geothermal energy potential in the world. Wayang Windu exploits this potential, providing an increased supply of electricity to the islands of Java and Bali and improving the lives of the local people without increasing Indonesia’s CO2 emissions.

Standard Chartered and Wayang Windu

In 2007 Standard Chartered made a commitment to the Clinton Global Initiative to finance and support USD8 to 10 billion of renewable and clean energy projects in Asia, Africa and the Middle East by 2012. As part of this commitment, funds were allocated to financing the development of Wayang Windu.

Wayang Windu has been fully operational since June 2009, and unit 2 alone is expected to displace the equivalent of 700,000-800,000 tonnes of CO2 every year. Standard Chartered is engaged to sell the carbon credits associated with Wayang Windu, which represents an exciting new business opportunity as this is the first time we have secured such a large direct source of Carbon Emission Reduction certificates.

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Asian Development Bank

Energy–efficient investment

In 2008, we partnered with the Asian Development Bank on a credit guarantee programme to support small and medium-sized private sector energy-efficiency projects in China.

The Energy Efficiency Multi-Project Financing Program helps energy users in China to access finance to improve energy efficiency in existing and new buildings. The programme finances retrofitting of existing buildings, typically producing energy savings of 20–40 per cent. Given China’s rapid urbanisation, improved energy efficiency of buildings will achieve substantial long-lasting reductions in energy use and greenhouse gas emissions.

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South Korea SinAn solar power plant

The largest photovoltaic solar project in Asia

This is Korea’s flagship solar project and one of the largest in the world. It began operating in two phases during 2008, ultimately with almost 25 MW capacity. The plant produces 33,000 MWh of electricity a year – enough to supply 7,200 households with non-polluting energy year after year. This project alone helps Korea reduce carbon dioxide emissions by 24,000 tonnes a year – the equivalent of planting 168,000 trees.

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Working with clients in the palm oil sector for better environmental and social performance

Sustainable Palm oil

As a member of the Roundtable on Sustainable Palm Oil (RSPO), the Bank expects RSPO membership when evaluating clients in this sector. In the case of one Indonesian palm oil plantation client, we made RSPO membership a prerequisite for lending and this was included as a covenant in our loan agreements. Another client was requested to conduct a High Conservation Value Assessment before beginning new plantings, even before this was made a requirement by RSPO in November 2008.

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Rapu Rapu mine

Rapu Rapu is a mining project in the Philippines. As one of five banks in the lending group we had concerns over a number of environmental and social aspects of the project.

During its commissioning, the Rapu Rapu mine was affected by a number of environmental and climatic events, including three typhoons and two accidental discharges of non-toxic effluent to waterways in late 2005. Lenders also became aware of shortfalls in community engagement and grievance mechanisms available to address livelihood concerns. Adding to our concerns, at the time of financing, the project did not meet the capital requirements for application of the Equator Principles.

As a matter of priority, we acted quickly to apply the Principles from the time of our involvement.

The mining company, with the support of the financiers, implemented a number of changes, including the construction of improved waste water management systems, drainage channels and by increasing the height of the tailings dam to further protect the surrounding communities. In addition, several community action programmes were initiated.

The eventual insolvency of the company meant that many of these planned actions were not completed. In March 2008, the project finance lenders (including Standard Chartered) sold their debt exposure to the project’s existing 26% shareholder.

The end of our involvement brought forth a dilemma that confronts many Equator banks - Do lenders have leverage over clients beyond loan exposure?

The Equator Principles succeed on the ability of a bank to improve project outcomes through specific recourse if a project does not comply with the required social and environmental covenants. Beyond the confines of our sphere of influence, Equator banks seek to be a promoter of environmentally sound financing by reaching out to other banks to encourage adoption of the Principles.

In 2009, we are going to work closely with financial institutions in our markets including China to encourage adoption of the Principles and help build their capacity to manage environmental and social risks in lending.

 
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