Japan’s Marubeni Corp pulls out of South African coal power plant project

South Africa’s 630 megawatt (MW) Thabametsi coal-based power plant project in northern Limpopo province has hit a new setback after Japanese group Marubeni Corp announced its pullout.

Marubeni’s decision was influenced by the withdrawal of some South African investors and South Korea’s state-run Korea Electric Power Corp (KEPCO) last month.

“As per our policy that we will not develop any new coal power project, we are in process of the withdrawal from the (Thabametsi) project with the Government of South Africa,” a Marubeni spokesman said.

Earlier this week, South Africa’s biggest state pension fund manager, the Public Investment Corporation (PIC), and the Industrial Development Corporation (IDC), told local media sources they would no longer support the project, which was planned to come online in 2021.

Companies around the world are coming under increasing pressure to ditch investments in coal, the most polluting of fossil fuels, and switch to greener forms of energy.

In 2018, Marubeni pledged to halve its net coal power generating capacity of about 3 gigawatts (GW) by 2030 to cut greenhouse gas emissions. On Monday, the company said it was increasingly difficult to sell its stakes in coal-fired power plants overseas.

Marubeni, along with KEPCO, holds a joint 50% stake in the $2.1 billion coal plant that was to be built in the Limpopo province’s Waterberg region, which has reserves of coal amounting to between 40% and 50% of South Africa’s estimated 30 billion tonnes of remaining deposits, according to the Minerals Council South Africa.

The Thabametsi power plant was one of two private coal power projects which had their bids accepted in 2016 as part of government’s Independent Power Producer programme, aimed at easing crippling power shortages in South Africa.