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
Testimonials
Antonio Mariano C. Almeda
National Electrification Administration Administrator
“I want to emphasize that achieving sustainable energy access in off-grid areas is not merely an option, rather, it is an essential step for building resilient communities and ensuring social equity. This pursuit requires the collective effort of stakeholders across various sectors to make it into a reality.”
Mario Marasigan
Department of Energy Undersecretary
“Think bold, act collaboratively and commit firmly. Let us empower our cooperatives, support our investors, and work together to light up every corner of the country.”
Lawrence Ang
CSV Managing Partner
“This project builds on momentum generated by the Department of Energy leadership towards a more ambitious climate goal and complements the government’s work in transitioning the Philippines towards cleaner sources of energy. It also helps ensure that our off-grid islands are not left behind and are given access to more affordable, reliable, and cleaner electricity.”