Canadian Lender Desjardins Considering Cutting Off Energy Pipelines
The Canadian credit union association and lender Desjardins is currently considering temporarily suspending lending related to energy pipelines, owing to concerns about the effects that such projects have on the environment, according to recent reports.
A spokesperson for Desjardins by the name of Jacques Bouchard told Reuters in a phone interview that the decision could become permanent and that a final decision wouldn’t be made until September.
Apparently, according to Bouchard anyways, the company has been evaluating its policies on such lending for the last few months. It’s noteworthy here, of course, that Dejardins is currently one of the backers of Kinder Morgan Canada’s high-profile expansion of the Trans Mountain pipeline.
If Dejardins does change its lending policy, then that means that the firm won’t be involved in the financing of projects such as TransCanada Corp’s Keystone XL and Energy East as well as Enbridge Inc’s Line 3.
Reuters provides more: “Such a move would follow that of Dutch lender ING Groep NV, which has a long-standing policy of not funding projects directly related to oil sands, and is the latest sign that pipelines could have a harder time getting funding as banks face increasing pressure to back away.
“Patrick Bonin, a campaigner with the environmental group Greenpeace, praised Desjardins for temporarily halting pipeline funding, but called on the lender to make it permanent and reconsider its C$145 million ($113 million) commitment to Trans Mountain.
“Desjardins is among 24 financial institutions that agreed to lend money to a subsidiary of Kinder Morgan Canada, majority owned by Kinder Morgan Inc of Houston, according to regulatory filings. A coalition of more than 20 indigenous and environmental groups, including Greenpeace, in June called on 28 major banks to pull funding for Trans Mountain, citing the risk of pipeline spills and their potential contribution to climate change.”
It’s hard to say how serious Desjardins is as of right now, or how much this news is a PR exercise, but we’ll keep you posted as the situation develops.
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