Coal divestment: AES’ Muong Dong 2 deal with Sev.en

15 minute read

The US energy company’s planned sale of its majority stake in a thermal coal plant to a privately held entity could lead to reduced emissions disclosure. It could also undermine AES’ responsible fossil fuel phase-out plan.

AES has a 51% ownership interest in the 1.2GW Mong Duong 2 (MD2) coal-fired power plant in Vietnam. It plans to offload this stake to Sev.en Global Investments (GI), the financial unit of a privately held Czech energy company. The transaction is due to close in 2025.

Sev.en GI does not produce standalone financial, emissions, or sustainability disclosures, meaning once the deal closes it is unlikely that information on the climate impact of MD2 will be reported.

The deal raises questions over public companies’ decarbonization strategies and the degree to which they simply move emissions from owner to owner rather than actively reducing them. AES has pledged to shed all its coal assets by the end of 2025. In this instance it is pursuing this goal by handing MD2 to an owner that has no emissions-reduction objectives and has actually increased climate pollution in recent years.

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