SOUTH AFRICA – Standard Bank Group Ltd., Africa’s biggest bank by assets, has become the first South African lender to release its policy toward funding of thermal coal mining and power projects.

The bank expected to reduce its financing of thermal coal projects “over time” in line with national agendas on emissions.

The policy comes as pressure mounts on financial institutions to cut lending to fossil fuel projects because of the carbon emissions they generate, contributing to global warming.

South Africa relies on coal for almost all of its electricity and exports it to countries including China and India. Its carbon emissions rival those of the U.K., an economy eight times its size.

Commenting in its Thermal Coal Mining Policy published, the bank also said it would not finance coal mining activities that removed mountain tops.

The policy statement follows Coal Fired Power Finance Policy last year in which it only agreed to finance in future ultra super-critical power stations where emissions were less than 750g CO²/kWh and considered ineligible supercritical power stations generating 500MW or more.

Standard says it will evaluate projects on a case-by-case basis, assessing the need for power in the country where the mine or power plant is situated and will ensure compliance with environmental and social laws.

“Standard Bank and its climate-conscious investors have set an encouraging precedent,” said Tracey Davies, director of Cape Town-based shareholder activist organization Just Share, in a statement.

“We are now looking to accelerate the pace at which banks and other institutions disclose and manage climate-change risks.”

According to the South African government’s Integrated Resource Plan (IRP) a roadmap document aimed at setting out how the country’s energy will be supplied by 2030, thermal coal will be 59% of the energy pie by 2030 down from over 85% currently.

Standard Bank’s Thermal Coal Mining Policy will apply to new coal mining projects as well as expansions of existing facilities owned by both project developers, as well as mining industry corporates.

Standard Bank reported flat earnings for the year to end December, dragged down by losses of US$248 million (R3.8 billion) at its struggling London-based joint venture with Industrial and Commercial Bank of China (ICBC) and a sluggish economy in the country.

Standard Bank said ICBC Standard (ICBCS) reported a US$248m loss during the period, with a single client costing its US$198m while restructuring costs rising US$30m and operations US$20m.