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Japan halts aid for coal-fired plants in Indonesia, Bangladesh

Japan will stop providing yen loans for the construction of coal-fired electricity plants in Indonesia and Bangladesh, the government said.

The policy reversal regarding the construction of the Indramayu plant in Indonesia and the Matarbari plant in Bangladesh came in response to international criticism of coal-fired power, a major source of greenhouse gas emissions blamed for global warming.

The Group of Seven nations agreed in 2021 to end new forms of aid by the year-end for coal-burning power stations that fail to take measures to curb emissions.

But Japan had maintained the plants were exempt as "ongoing cases," prompting environmental groups to accuse the country of breaking the G7 promise.

The G7 comprises Britain, Canada, France, Germany, Italy, Japan and the United States, plus the European Union.

Indonesia and Bangladesh were conducting surveys for the projects with Japan's backing, but neither cases have advanced to construction.

"We decided that we cannot proceed any further with these cases as subjects to yen loans," Foreign Ministry Press Secretary Hikariko Ono said at a news conference.

She also said the government will continue to assist developing countries in the quest for a decarbonized society.