The Turnbull government has responded to the increasing unwillingness of Australia’s banks to fund major coal projects by overturning a ban on government-backed loans to domestic miners.
Steve Ciobo, the minister for trade, says protesters and activist groups have so discouraged Australia’s retail banks from financing “otherwise viable exporters in the coal sector” that the government must step in to fund a growing “market gap.”
He said government funding would now be provided via the Export Finance and Insurance Corporation (Efic), and he has written to Efic asking it to change its mandate to broaden its lending criteria. Earlier this year, the financial regulator warned that climate change posed a material risk to the entire financial system, urging companies to start adapting.
And Australia’s big four banks have increasingly distanced themselves from controversial coal projects in recent years, but the government has complained that banks have been scared off by aggressive campaigning by activist groups.
The Commonwealth Bank indicated last month it would not lend money to Adani’s proposed Carmichael coalmine, leaving the project without financing from any of the big four banks.