China Coal Exit: Financial Mechanisms for China To Drive a Coal Transition in Pakistan and Vietnam
China Coal Exit: Financial Mechanisms for China To Drive a Coal Transition in Pakistan and Vietnam
Partners: Fudan International School of Finance (Green Finance & Development Center) of Fudan University
Background of the Project/ Challenge
The study aims to challenge the status quo on CFPP early retirement and encourage China to help Vietnam and Pakistan accelerate their CFPP retirement goals and mitigate the impact of climate change.
- Provide a pathway for accelerating China’s international transition from coal-based power generation to renewable energy by leveraging China SOEs
- Evaluate financial mechanisms that capitalize the unique features of China SOEs to offer transition finance
- Produce a policy memo to engage Chinese SOEs on the potential financial mechanisms they can use to unlock early coal retirement overseas.
What We Did
CSV conducted the following workstreams:
- Due diligence and policy review. Plant operating and financial data are collected while various potential scenarios and post-announcement structures are gathered along with country level data for both Pakistan and Vietnam. Respective country policies for CFPP operations for Pakistan, Vietnam and China are also considered.
- Plant-by-plant analysis. Before undergoing evaluation through a financial model, CFPPs were first assessed through certain criteria to determine which of the plants were the most appropriate candidates for retirement
- Valuation, Financial and Scenario Analysis. After selecting the set of CFPPs based on the selected criteria, each candidate for early retirement or transition will be evaluated based on their Net Present Value (NPV).
Outcome
Upon completion of the Study – a short 1 page discussion on findings shall be sent to relevant China SOE portals as suggestions for approaches along with a public article showing the results
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