Singaporean Banks Finance Indonesia Captive Coal Plants
Large banks continue to fund coal-dependent industrial firms despite implementing formal coal financing restrictions.
Updated on Oct. 20, 2026 in Financial Services
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Between 2020 and 2025, major Singaporean banks DBS, OCBC, and UOB provided financing to industrial groups that utilize captive coal power plants. These banks had previously announced restrictions on coal project lending starting in 2019.
Why it matters
Banks often use policy footnotes or sector-specific language to distinguish industrial captive power plants from general coal-fired generation. This allows financial institutions to maintain sustainability policies while supporting clients in energy-intensive mineral processing.
DBS, OCBC, and UOB have collectively loaned $923 million to Harita Nickel and its subsidiaries since 2018. Additionally, captive coal accounted for 22% of Indonesia's energy and industrial sector emissions in 2023.
The players
DBS
DBS is a major multinational banking and financial services corporation headquartered in Singapore.
OCBC
Oversea-Chinese Banking Corporation is a prominent financial services group based in Singapore.
UOB
United Overseas Bank is a multinational banking organization headquartered in Singapore.
Harita Nickel
Harita Nickel is an Indonesian mining company focused on the extraction and processing of nickel ore.
Market Forces
Market Forces is an environmental campaigning organization that tracks the financial sector's funding of fossil fuel projects.
The details
Industrial companies in Indonesia, particularly in the nickel sector, build on-site coal plants to power mineral processing facilities. Market Forces has raised concerns over these lending practices and filed a complaint to the Singapore Exchange regarding OCBC's involvement.
Timeline
2018: Banks began collective lending to Harita Nickel.
2019: Banks announced restrictions on new coal financing.
2020-2025: Banks funded coal-dependent industrial groups.
2023: Indonesia recorded 2.2 million tons of nickel production.
July 2024 - July 2025: 4.5 gigawatts of captive coal capacity became operational.
Market Landscape
These financing arrangements reveal the complexity of aligning industrial capital needs with global sustainability goals. Banks face pressure to balance long-term net-zero targets with the immediate economic growth requirements of major industrial clients.
The ongoing reliance on captive coal may impact the carbon footprint of global supply chains for essential commodities like nickel and aluminum. Investors and consumers should monitor whether banks tighten their policy definitions regarding captive power to align with broader climate standards.
The takeaway
The tension between industrial energy needs and climate goals remains a critical challenge for international finance. Transparency in how banks define and report their exposure to coal-reliant assets is essential for stakeholders assessing climate risk.
Further reading
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Source note: This article includes information reported by ImpactAlpha.
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