Caixin
May 05, 2022 05:21 AM
FINANCE

PBOC Backs Coal Industry With $15 Billion of Credit

What’s new: China’s central bank will provide 100 billion yuan ($15 billion) of credit lines to support coal development and storage as the country seeks to secure its energy supply, the People’s Bank of China said Wednesday.

The credit lines will be issued through relending facilities to enhance safe coal production and reserves, including modern coal mine construction, green and efficient technology application, intelligent mine construction and secured supply to coal-fired power plants, the People’s Bank of China (PBOC) said.

The funding support is to address the “greater uncertainty and challenges" facing China's energy security and stable economic operation amid a complex global situation and highly volatile international energy prices, an official at the central bank said.

The context: Coal has remained the top priority for China’s energy security as the fossil fuel generates about 60% of electricity nationwide, even though the country has set ambitious goals for renewable energy development to reduce carbon emissions and counter global warming.

Last month, the State Council laid out a plan to add 300 million tons of coal production capacity this year, reflecting policymakers’ concerns over energy security after last year’s nationwide power crunch.

The cabinet in November instructed the central bank to set up 200 billion yuan of special relending facilities to support coal development, among other sectors.

Quick Takes are condensed versions of China-related stories for fast news you can use.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bob.simison@caixin.com)

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