Coal power projects are strutting back, and the developers are swinging “the need for baseload demand” as their backstage pass to justify new projects.

Even Energy Secretary Sharon Garin is waving the green flag for coal, signaling to the media that if moratorium-exempt projects clear the Department of Energy’s (DOE) review, they will be given approval to advance to commercial developments.

Despite the enforced moratorium, DOE data shows that coal projects outside the ban could top 20,000 megawatts, with about 4,000 MW to 6,000 MW gearing up for a fresh run at the grid.

As Energy Undersecretary Rowena Cristina Guevara bluntly admitted, “our coal that is not covered by the moratorium is 20 gigawatts (GW). There are many of them, but I think only four to six gigawatts will be pursued. Some are having difficulty seeking loans from banks for coal projects, while others have very deep pockets.”

So far, the “coal comeback train” has found its new first-movers: Aboitiz Power is advancing its 150 MW Therma Visayas plant expansion in Cebu; then Meralco PowerGen is revving up its commercial development plan for the 1,200 MW Atimonan One Energy project in Quezon.

The industry is also expecting Semirara Mining and Power Corp. of the Consunji group to revive its previously-shelved 700 MW Saint Raphael coal plant venture.

I won’t dispute the need for additional baseload capacity, especially since nuclear is still stuck in the pipeline and energy storage and renewables can’t yet carry the load of 24/7 power supply availability and reliability for the country.

But as coal projects are now clearly crawling back into the spotlight, the real drama isn’t just about who’s building them. It is similarly noteworthy to focus on which banks will flinch or fold when asked to bankroll this next batch of capital-heavy projects.

In recent years, the country’s biggest banks daringly cast aside funding greenfield coal, so watching who defies to quietly or confidently ink the next loan deals will reveal just how bold, forgetful, or flexible those bank promises would really be. And it’s also interesting to see what their justifications would be for changing their minds. Will the mantra be: saying no to coal, until the right deal comes along? And if so, will those green pledges turn to gray signatures?

Rizal Commercial Banking Corp. (RCBC) of the Yuchengco group was the first to take the coal-free pledge back in December 2020, an unflinching declaration through a media event. Bank of the Philippine Islands (BPI), Security Bank, and BDO Unibank also joined the bandwagon. But while these major banks raced to declare their climate virtue, others chose the safety of silence.

In its 2024 Sustainability Report, RCBC reiterated its commitment “to cease funding of the construction of new coal plants in the country,” adding that “the bank’s remaining exposure to coal-fired power projects will be zeroed out by 2031.”

Along the same lines, BPI of the Ayala group adopted a policy stipulating that it shall have “no additional commitments to finance greenfield coal power generation projects,” and that “the outstanding loans of the BPI Group to coal power generation shall be reduced to 50 percent of current exposure by 2026, and zero by 2032.”

In its published 2023 Sustainability Framework, Security Bank similarly instituted a firm policy on “no new coal-related power generation plant financing and zero out coal financing by 2033.”

For the country’s largest bank, BDO, its Energy Transition Finance Statement in September 2022 forthrightly decreed that “BDO will continue its current practice of not lending to new coal-fired power plant capacity, a practice in place since 2019,” qualifying further that the bank “commits to reduce its coal exposure by 50 percent by 2033, while ensuring that its coal exposure does not exceed two percent of its total loan portfolio by 2033.”

Nevertheless, the local banks will face their ultimate test as the new coal plant projects advance to commercial developments. It will be a thrilling scene to witness who dares to pose for the cameras shaking hands with project sponsors as they sign those controversial loan deals.

Trump’s energy policy favoring the revival and expansion of traditional energy sources, primarily coal, oil, and natural gas, is widely perceived to have been setting the stage for coal resurgence—even in various parts of the world, the Philippines included. In the US, in particular, Trump rolled back environmental rules—primarily easing EPA restrictions on power plants—and he likewise declared a “national energy emergency” that somehow covered sustaining their country’s coal-fired generating facilities, including prioritization on the use of domestic coal resources as well as streamlining permitting processes for such energy projects.

Correspondingly, Trump ordered state financing agencies, mainly the US Exim and International Development Finance Corp. (DFC), to open up facilities for coal developers. For the US Exim, that essentially lifted a 12-year moratorium on supporting foreign coal projects and likewise overturned prior restrictions tied to carbon footprint reduction mandates.

In line with that seismic energy policy pivot, the titans of Wall Street like Bank of America, JP Morgan, Citigroup, Goldman Sachs, Wells Fargo, and Morgan Stanley had all dramatically severed ties with the Net Zero Banking Alliance. That was widely perceived as a concession to right-wing criticism of ESG (environmental, social, and governance) policy. That framework, which is also widely labeled as “woke capitalism,” is being slammed for supposedly pulling banks off course from their core mission of maximizing financial return on investments, arguing that by prioritizing ESG metrics over profits, they are violating a fiduciary duty to shareholders.

Across energy markets, project developers are conceding that capital is tilting back toward fossil fuels, while clean energy ventures are already facing some degree of liquidity tightening. As coal revival gains momentum, will Philippine banks chase the seductive pull of profit from these new plants or hold the line on their ethical energy commitments amid the crack in the ESG convictions of many of their peers?