BANKS DODGY DEALS CAMPAIGNS
Sections
Banks Dodgy Deals Campaigns
Our campaigns
Banks and Climate
Banks and Human Rights
Banks and Nature
Our projects
Tracking the NZBA
Banks and Russia
Banks and Steel
Tracking the Equator Principles
Tracking the PRBs
Find a Better Bank
Banks and the OECD Guidelines
Media
News Publications
Raiffeisen Out! Bank.Green End Coal Finance Plastic Banks Tracker Defund TotalEnergies Financial Exclusions Tracker Equator-Complaints.Org Don't Buy into Occupation Banks & Biodiversity Forests & Finance Drop JBS StopEACOP Fossil-Free Finance
BankTrack
About BankTrack Organisation Our team Our board Our annual reports Funding and finances Guiding principles Our history BankTrack in the media Team up with us Our privacy policy Donate Visit us
Successes Contact BankTrack
Donate Mailing list Facebook Twitter Linkedin Login
Home › Dodgy Deals ›
Dodgy Deal
Jambi-2Indonesia

Project – Active

This profile is actively maintained
Profile by:
BankTrack
Contact:

Camilla Perotti, Banks and Coal Campaigner

Last update: 2025-01-20 00:00:00
Berbak National Forest in Jambi province, where the coal plant is planned to be built. Photo: James Maiden www.cifor.org Center for International Forestry Research, CC BY-SA 2.0 , via Wikimedia Commons

Project – Active

This profile is actively maintained
Profile by:
BankTrack
Contact:

Camilla Perotti, Banks and Coal Campaigner

Last update: 2025-01-20 00:00:00
Why this profile?

Why this profile?

Jambi-2 is a coal-fired power plant being proposed for construction in Indonesia’s Sumatran wilderness, in a region already plagued by this fossil fuel’s impacts. If built, it will compound the severe health and environmental harms local communities are already experiencing. Jambi-2 will greatly increase Indonesia's coal-related greenhouse gas emissions and prolong the country’s coal power dependency.

What must happen

Financial close has not yet been reached on Jambi-2, so banks should immediately rule out finance and facilitation for the project and its developing companies China’s Huadian Corporation and Indonesia’s state utility PT PLN.

About
Sectors Coal Electric Power Generation , Coal Mining
Location
Status
Planning
Design
Agreement
Construction
Operation
Closure
Decommission

The Jambi-2 coal-fired power plant was proposed by Indonesia’s state utility, Perusahaan Listrik Negara (PLN), for construction in Jambi province on the island of Sumatra, Indonesia. The plant would consist of two units of 350 megawatts (MW) generation capacity each. The Jambi plant would source its coal from a mine directly adjacent to the coal-fired power plant.

As of August 2023, the plant was reported as being “in the cancellation process” at PLN and governmental levels. However, according to Inclusive Development International (IDI)’s report “Blowing Smoke”, PLN stated by email to researchers in September 2023 that China Huadian Corporation was still developing the project and that the project was moving toward financial close. This is in spite of Huadian announcing in October 2022 that it would withdraw from the project and Chinese President Xi Jinping’s announcement at the UN General Assembly in 2021 that China would no longer be developing overseas coal projects. Huadian did not respond to IDI’s requests for a comment on their involvement in the project.

In November 2024, Indonesian President Prabowo Subianto announced the country’s intention to retire all fossil fuel power plants within 15 years. This intention would clash with the development of any new coal-fired power plant, as, on average, these typically remain operational for 40-50 years. As one of the projects developers, PLN, is a state-owned utility company, the company should adhere to the government’s plans by cancelling this project.

Considering these factors and without any clear official updates on the project for the past three years, the project can be presumed shelved, although no official cancellation statement has yet been made.

Impacts

Impact on human rights and communities

Impacts on local communities The Environmental Justice Atlas estimates that 3,000 people may be affected by the project. Potential impacts to those living in and around the construction zone include loss of livelihood, traditional knowledge and land. Small agricultural villages like Lubuk Napal and Pemusiran, immediately next to and nearby the proposed Jambi-2 site respectively, are already heavily affected by the existing coal mining industry. Thousands of trucks bringing coal to other plants hit and kill dozens of pedestrians each year on the two-lane highway in the area and cause gridlock which prevents villagers from accessing essential services (including causing deaths of some locals waiting to get to hospital). Water resources, previously potable and used for bathing, have been tarnished. The use of the extracted coal by Jambi-2 to create power will accentuate and lock in these impacts.

Loss of Indigenous peoples’ land and knowledge Small-scale crop cultivation and inter-community cooperation in land management are some examples of traditional land management practised by Indigenous populations in Jambi which have been disrupted by coal developments. The displacement of Indigenous peoples in Sumatra entailed in the proposed Jambi-2 coal-mine-and-power project would further jeopardise their land stewardship and practices.


Impact on climate

Locking-in coal Jambi province has coal reserves which are being mined intensively. These reserves are vast, according to Jambi Province’s head of Mineral Resources: if mined at current rates (between 13 and 19 million metric tons per year), the reserves of 1.9 billion metric tons are projected to be depleted in 100 years. As a mine-mouth project, the Jambi-2 coal power station would burn these resources at the source from which they are extracted. Cancelling coal-fired power projects in rapidly growing economies like Indonesia is identified by some experts as the most urgent priority in stopping climate change. WALHI Jambi, the province’s branch of Indonesia’s largest environmental NGO, has identified significant opportunities for renewable energy alternatives to supply the province with energy. These include solar, wind, geothermal and small-scale hydroelectric projects. Building new coal power, rather than renewables, further perpetuates Indonesia’s coal dependence.


Impact on nature and environment

Destruction of critical ecosystems A World Bank blog points out that Jambi province in central Sumatra is “home to forests and peatlands that regulate water flows, store carbon, support biodiversity, and are lifelines for traditional communities such as the Talang Mamak, Orang Rimba, and Melayu peoples” but that “these rich landscapes are fast disappearing”, with emissions from land use change accounting for over 85% of the province’s emissions. Jambi-2’s development will undoubtedly entail further significant land-clearing, both to build the actual plant as well as accompanying infrastructure like transmission lines and roads.

Threatening endangered species Endangered species living in Jambi, like the Sumatran elephant, are increasingly threatened by the creeping loss of nature from industrialisation and land-use change. Industries like palm oil agribusiness and coal mining and power, like the proposed Jambi-2 project, are triggering this effect.

Financiers

No detailed information is publicly available on the specific financing arrangements for the plant. IDI’s “Blowing Smoke” report states that the International Finance Corporation (IFC) is exposed to the Jambi-2 project via equity investments in Postal Savings Bank of China (PSBC). PSBC is a major lender to China Huadian Group, the developer of Jambi-2. 

In 2024, Bank of China signed a comprehensive strategic cooperation agreement and a special cooperation agreement on green development with China Huadian Group, to further the collaboration with the Group, particularly on energy project financing, green finance, and technology finance. In September 2024, Bank Mandiri established a strategic partnership with China Huadian’s subsidiary PT Huadian Bukit Asam Power (HBAP). The partnership entails an investment credit financing of USD 1.27 billion to refinance and strengthen HBAP's operations as an electricity provider, and, specifically to support the operation of the Sumsel-8 coal-fired power plant in South Sumatra and the development of other power projects at a national level.

Huadian’s power purchase agreement with PLN is a build-own-operate-transfer scheme (“BOOT”). Although details about this type of coal power plant development are usually in confidential contracts, it likely means that, if the project moves forward, Huadian will make equity investments in the project and seek financing from banks and other financial institutions.

Recent research by BankTrack, IDI, and Recourse, has identified ten commercial banks that, in light of their past financial relationships with the developing companies or past financing for similar projects in the area, are likely to be approached for finance of this project. These are Bank of China, DBS, Hana Financial Group, Maybank, Mizuho Financial Group, OCBC Bank, and Indonesian banks Bank DKI, Bank Mandiri, Bank Negara Indonesia, and Bank Rakyat Indonesia. 

This research also showcased how Jambi-2 is only one project in a vast list of proposed and announced coal power projects in South- and Southeast Asia currently seeking finance.

Institution type
Finance type
Year
Companies

In 2018, a subsidiary of China Huadian Group signed a power purchase agreement with PLN to build the Jambi-2 plant and supply electricity locally. As described above, PLN has maintained in October 2023 that Huadian is still developing the project and that the power purchase agreement is still in effect, while Huadian has provided no update on the project status.

Project sponsor

China Huadian Group

China
Website
No companies

Other companies

Perusahaan Listrik Negara (PT PLN)

Indonesia
Profile
Website
No companies
Governance
Norms & standards

Applicable norms and standards

1992 United Nations Framework Convention on Climate Change
The Paris Agreement
UN Guiding Principles on Business and Human Rights
News
BankTrack
Partners
Blog
External
Blog
BankTrack news BankTrack blog Partner news Partner blog

Major ‘coal banks’ refuse to stop financing coal power boom in Asia

To stop a wave of new coal development across Asia, the End Coal Finance coalition is asking likely financiers to pledge not to back new coal power projects.
2024-11-14 | Nijmegen | BankTrack, Inclusive Development International, Recourse
Blog
BankTrack news BankTrack blog Partner news Partner blog

Coal Havens - Asia’s biggest banks still open for coal business after COP28

The largest banks in India and Indonesia – global hotspots of the coal industry's growth – have no coal exclusion policy
2024-01-23 | Will O'Sullivan – BankTrack
BankTrack news BankTrack blog Partner news Partner blog

Indonesia delays coal closure plans after finance row with rich nations

After its pleas for grants not loans fell mostly on deaf ears, Indonesia has watered down its plans to shut coal power plants early
2023-11-02 | Climate Home News
Blog
BankTrack news BankTrack blog Partner news Partner blog

World Bank is backing dozens of new coal projects, despite climate pledges

New research shows that the IFC is providing back-door support to at least 39 new coal projects throughout China, Indonesia and Cambodia.
2023-10-04 | Inclusive Development International, Recourse, Trend Asia
Resources
Documents
Links
2024-01-23 00:00:00

Coal Havens

The banks and loopholes keeping coal finance alive in Asia
BankTrack publication
2024-01-23 00:00:00 | BankTrack
2023-10-04 00:00:00

Blowing Smoke

How Coal Finance is Flowing through the IFC’s Paris Alignment Loopholes
Partner publication
2023-10-04 00:00:00 | IDI

Global Energy Monitor Jambi-2 profile

Send feedback on this profile
Sections
Banks Dodgy Deals Campaigns
Our campaigns
Banks and Climate Banks and Human Rights Banks and Nature
Our projects
Tracking the NZBA Banks and Russia Banks and Steel Tracking the Equator Principles Tracking the PRBs Find a Better Bank Banks and the OECD Guidelines
Media
News Publications
Raiffeisen Out! Bank.Green End Coal Finance Plastic Banks Tracker Defund TotalEnergies Financial Exclusions Tracker Equator-Complaints.Org Don't Buy into Occupation Banks & Biodiversity Forests & Finance Drop JBS StopEACOP Fossil-Free Finance
BankTrack
About BankTrack Organisation Our team Our board Our annual reports Funding and finances Guiding principles Our history BankTrack in the media Team up with us Our privacy policy Donate Visit us
Successes Contact BankTrack
Vismarkt 15
6511 VJ Nijmegen
The Netherlands
Contact@banktrack.org
Donate Mailing list Facebook Twitter Linkedin
©2023 BankTrack
BankTrack is a registered charity in the Netherlands (ANBI) - RSIN 813874658
Find our privacy policy here

Stay up to date

Sign up now for all BankTrack's news


Make a comment

Your comment will be reviewed, before being posted