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Funding for new coal undermines Greece’s potential for a living economy

The recent decision of Italian chief prosecutor Francantonio Granero to order the closure of two power units at Vado Ligure has revealed the well hidden killer assumption of coal: human deaths and environmental damage. In Greece, plans by the Public Power Corporation for a EUR 1,4 billion lignite burning power plant, Ptolemaida V, undermine the crisis stricken country’s potential for sustainable economic recovery.

Scheduled to begin operation in 2019, at the earliest, the new 660 MWe plant will emit an annual of 4,6 million tonnes of CO2, which will cost EUR 92 million in 2020 and will reach EUR 240 by 2040 onwards. Not estimating the ‘external’ cost of coal burning on human health and natural environment, the financial viability of Ptolemaida V has already been seriously challenged.  WWF Greece and many other environmental groups, such as Climate Alliance , an umbrella organisation of 110 German environmental groups and the Bankwatch Network are campaigning against this obsolete investment plan, which threatens to lock Greece into an unsustainable energy future: http://www.wwf.gr/ptolemaida5en/.

The main financing agency showing interest in the coal project of Ptolemaida V is the KfW Bank Group, which has agreed to provide the Public Power Corporation with a EUR 739 million bond loan, scheduled to mature in 2028. Questions however arise concerning the reasons why would a bank so actively promoting a “green” portfolio invest in coal. Especially as the European Investment Bank recently made it clear that Ptolemaida V is too dirty for the sustainability criteria it has set for coal, why would KfW risk marring the green profile it tries to build? According to Berliner Zeitung, the construction of the new plant will secure 1,150 jobs in Germany, whereas in Greece the number of permanent jobs is just 250. Is this a jobs-oriented decision, or a political one?

Last summer, the governments of Greece and Germany agreed to the establishment of a development fund, which will be financed by KfW and will aim to provide small and medium sized enterprises with affordable loans. At the same time, Germany’s development financial giant has also agreed to provide vital support for coal. Greece being a notorious backslider on green policies, a burning question calls for answers: is Greece’s potential for truly sustainable economic recovery in the radars of KfW and the German Government at all?

The country’s abundant sun and wind seems to be sinking out of the financial picture. The Public Power Corporation recently mothballed its plans for Europe’s largest photovoltaic park of 200 MW, which would cost EUR 600 million and would cover abandoned lignite fields in Ptolemaida, also including a solar panel construction unit. This solar park would offer 550 jobs. Plans for a smaller, 50MW, solar park, in the energy centre of Megalopoli, have also been stored in Greece’s energy policy freezer. These are only two out of a multitude of investment plans which could help the PPC shift towards clean energy production and increase its competitiveness.  

Cash strapped Greece urgently needs financial support that will help the desperate country build a living economy, based on its indisputable comparative advantages and important human capital. Clean energy is only one chapter, but considerable potential remains untapped in the sectors of primary production, tourism and industry.

In planning, when a killer assumption is identified, it is time to rethink the project. The case of coal is replete with killer assumptions. The time has come for financial institutions to clean their investment portfolios from fossil fuels and start supporting the necessary shift towards sustainable economic recovery across Europe.


Source: www.neurope.eu