On Friday, Investec Group announced that it would continue funding coal projects in South Africa for another seven years, while its UK subsidiary plans to end all coal financing exposure by 2027. This decision has drawn criticism from activists and environmentalists who argue that South African banks should align with their global peers in divesting from fossil fuel projects.

However, the banks have emphasized the need to balance developmental goals in Africa with the environmental impact of fossil fuels. Investec stated in its climate report, published on its website, that it is adopting a cautious approach due to the developmental requirements and dependency of a developing economy on fossil fuels.

Investec Plc, the UK operations of the bank, aims to remove all coal from its loan book by March 31, 2027, while Investec Ltd, the South African operations, targets the same goal by March 31, 2030. The bank has already ceased providing limited recourse project financing to new thermal coal mines, irrespective of their jurisdiction.

Investec has indicated that it will address questions regarding its climate report in July. Typically, banks prefer full recourse rather than limited recourse, as the latter restricts their ability to recover loans by seizing assets beyond what is specified in the loan contract.

South Africa, ranked as the world's 14th largest emitter of greenhouse gases, has committed to achieving net zero emissions by 2050. However, the country's reliance on aging coal-fired power plants and a thriving coal mining industry, which contributes significantly to government tax revenue, present challenges in meeting this target.