China’s banking regulator said on Tuesday that lenders including policy banks must ensure that the financing needs of the coal and power sectors are met so that consumer heating during winter is not affected. Beijing is racing to deliver more coal to utilities to restore supply as nearly two-thirds of provinces grapple with power rationing. Officials say the power supply situation remains challenging.
“We should guide banking and insurance institutions to actively cooperate with local governments and support the main coal-producing areas and key coal enterprises in Shanxi, Shaanxi, Inner Mongolia and Xinjiang to increase the supply of power and coal,” the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement.
But funds must not be used for speculating and profiteering on bulk commodities such as coal, steel and non-ferrous metals, the CBIRC warned. It is also strictly prohibited to withdraw or cut off loans to coal-fired power plants, coal mines and other enterprises and projects that meet requirements, in a “one-size-fits-all” approach, the regulator said. Near-term coal supplies could also come under further pressure as bad weather disrupts production. In Shanxi, the northern province had shut 27 coal mines as of Monday because of flooding caused by heavy rain, the provincial government said in a statement on Tuesday.