A new report from Insure Our Future claims that coal power plants within Asia are finding it increasingly difficult to obtain insurance.
The pressure group said that it had obtained documents from KEPCO, the national power utility in Korea, that show it is having to turn to smaller and more inexperienced firms in order to secure cover for coal power plants already in operation.
The group claims that Asia is at the centre of global coal power generation and development, accounting for 91% of all plants planned or in construction worldwide (414GW out of 457GW) and 73% of operating coal plants (1,518GW out of 2075GW). KEPCO is a major player, developing and operating coal power projects in several Asian countries and arranging insurance on the global market.
In March 2018, KEPCO signed contracts with 19 insurers to underwrite the construction of the 1.3GW Nghi Son 2 plant in Vietnam for a total $7.2 billion. Four years on, it says that 72% of the insurance capacity which underwrote that project has been withdrawn from the market.
Peter Bosshard, global coordinator of the Insure Our Future Campaign and report author, said: “Major international insurers have withdrawn from coal projects and been replaced by a haphazard coalition of the willing, consisting of a few global climate laggards, small speciality insurers and assorted companies from the Global South. Our report exposes Starr, Liberty Mutual, Berkshire Hathaway, Allied World and Lloyd’s of London as the coal industry’s last lifeline.”
Insure Our Future says that in June 2021, KEPCO had to find 24 different insurers to provide $556m of cover for the operation of its small 206MW Cebu Naga power plant in the Philippines. Eleven were not insuring any other KEPCO projects and one, New India Insurance, lacks the A-credit rating that project financiers typically expect insurers to provide.
