Standard Bank, Africa’s largest lender of assets, while defending its investment in fossil-fuel projects, stated that the continent’s energy demands must be balanced with climatic welfares.
According to Just Share, a shareholder advocacy group based in Cape Town, Standard Bank’s exposure to coal mining, oil and gas production, and fossil fuel power generation increased by 21% to R2112 22nd billion last year.
Even though that is about five times as much as its exposure to renewable energy projects, loans for green energy projects increased 84% in one year.
According to Kenny Fihla, Chief Executive Officer of Standard’s Corporate and Investment Banking Unit, Africa and other African nations cannot ignore the inadequate supply of power.
Noting the need for a far more well-rounded approach to finding solutions and the fact that the issues cannot be handled in a day.
For financing to new projects that would increase the consumption of fossil fuels, Standard and other banks are coming under increased scrutiny across the continent.
Governments are defending the right to develop their natural resources on a continent that produces just 4% of greenhouse gas emissions, while at the same time they are being pushed to contribute to funding embryonic oil and gas projects from Mozambique and South Africa to Senegal.
Standard Bank’s assertion that additional fossil fuels are necessary to sustain growth in Africa is unsupported by facts, according to Just Share in response to questions.
The bank’s financial interests in funding fossil fuels and its connections to African governments aiming to accelerate fossil fuel development are what have shaped its stance on this topic, Just Share added.
260 groups have requested banks to avoid the East African Crude Oil Pipeline proposed by TotalEnergies SE, which would stretch from Uganda to the coast in Tanzania. They claim the project will endanger wildlife habitats, have an adverse effect on communities, and increase emissions.
A decision on its involvement to provide funding will take place as soon as possible. This was made known by Standard Bank’s CEO, Sim Tshabalala, after Standard Chartered last month expressed unwillingness to finance the project.
The project’s potential social and environmental effects, which are anticipated to cost $5 billion, are still being taken into account, according to Fihla.
Fihla also noted that the development of Oil in Uganda will positively impact the country’s GDP, and therefore they will take as long as is required.