National Bank Of Canada Commits CAD 20 Billion To Renewable Energy

The National Bank of Canada has announced its intention to increase financing for the renewable energy sector to a total of CAD 20 billion ($14 billion) by 2030. Targeted sectors for this financial support include large-scale projects in the wind, solar and hydro streams.

“By financing these projects, we aim to contribute to diversifying energy supply, enhancing energy security and mitigating emissions associated with power generation,” stated the bank. 

As of October 31, 2024, its total lending commitment for renewable energy had reached CAD 15 billion ($10.4 billion).

According to its report, the updated target factors in expected amortization and repayments of the existing portfolio through 2030. The CAD 20 billion target translates into about CAD 10 billion ($7 billion) in additional renewable lending commitments over the next 6 years, it explains.

The bank is also a lender to thermal coal, natural gas and nuclear power plants, but the CAD 20 billion target is significant since it is dedicated to renewable energy alone. It should support Canada’s renewable energy goal of achieving a 90% share in its total electricity supply by 2030, expanding it to 100% in the long term. However, its financing is not limited to Canada alone, having supported renewable energy projects in the US too. 

The new commitment, as shared in its Climate Report for 2024, is aligned with the bank’s overarching net-zero target of reducing its GHG emissions from operational and financing activities by 2050. The bank stated that financing renewable energy projects remains central to lowering the weighted average emission intensity of its power generation portfolio. 

With this new renewable energy financing target, the bank seems to have paid heed to climate advocates. Investors for Paris Compliance, a climate group that works with investors to hold publicly traded Canadian companies accountable to their net-zero promises, has welcomed the move.

“By specifically targeting renewable energy, National is setting a new high bar among Canadian banks,” stated the Senior Advisor of Investors for Paris Compliance, Renaud Gignac. “And it is simultaneously enabling an economy-wide transition to net zero by increasing financing to climate solutions.”

Gignac shared that, so far, the Royal Bank of Canada was the only Canadian bank to have a specific target for renewable energy financing with CAD 15 billion by 2030. The National Bank of Canada exceeds this target by CAD 5 billion ($3.47 billion).

Nevertheless, in the Trump 2.0 era, banks are quick to take the cue as 4 of Canada’s biggest banks, including the National Bank of Canada, have exited the UN-backed Net-Zero Banking Alliance following the departure of the 6 largest US banks. The Net-Zero Banking Alliance aims to align financial institutions with net-zero GHG emissions by 2050.