Buying JBIC and/or KEXIM bonds is effectively funding coal incineration through Vung Ang II and should not be part of a climate aligned SSA portfolio. Effectively, this amounts to industrial subsidisation policy for ailing domestic South Korean and Japanese coal ‘technology’ businesses, using Vietnam for taking the actual carbon emissions hit.
This article is a starter from our side to cover the space, based on our experiences both from managing SSA portfolios in general and climate risks in particular.
We believe a bare minimum of climate awareness in terms of managing SSA bond portfolios should result in at least some sort of exclusion lists: buying some SSA bonds is effectively funding some of the worst tail risks in terms of fossil projects, alternatively lending credence (and capital) to some of the more egregious greenwashing efforts in the marketplace.
