International Coal Debate Centers on South Africa


Future Site of Medupi Power Station

A coalition of over 70 South African activist groups is asking for U.S. support to help stop the construction of what would be the world’s fourth largest coal plant in the world. In response, U.S. organizations including the Sierra Club and Friends of the Earth have launched an international campaign to prevent the World Bank from financing this massive project lead by African energy giant Eskom. The debate over South Africa’s mega-coal plant is likely to come to a head this Thursday, April 8th, when World Bank representatives are expected to vote on whether or not to finance its construction. U.S. environmentalists have joined in the fight by calling on Treasury Secretary Timothy Geithner to vote against the World Bank loan.

Interestingly, this is hardly a case of Western environmentalists attempting to tell a developing country how to provide cheap energy to its citizens. Indeed, it’s grassroots opposition inside of South Africa itself that has grown and spread to the international community.

Three weeks ago, South African activists Makoma Lekalakala and Caroline Ntaopane traveled to the United States to drum up opposition to the proposal to build the 4,800 megawatt coal plant in their country. In response, U.S. environmental groups, including the Sierra Club,  agreed to help convince U.S. policy-makers to use their influence at the World Bank to ensure the plant does not receive funding. To finance the project, Eskom is counting on a $3.75 billion loan from the World Bank, without which the coal plant may prove too expensive to build. In order to pay back the loan, the utility plans to triple electricity rates in many South African communities – accounting for at least part of the widespread opposition to the plant in South Africa.

“The World Bank’s mission is to alleviate poverty,” wrote Bruce Nilles and Mark Kresowik of the Sierra Club after meeting with Lekalakala and Ntaopane last month, and “Eskom officials claim the coal plant is going to help the poor get access to electricity. But hearing Makoma and Caroline describe how their community’s electricity rates are tripling over the next five years….we know that this loan will do anything but help the poor.”

Activists in the U.S. have kicked into action, calling on the United States to vote against the loan to Eskom. The Obama administration has so far indicated it would abstain from voting on the proposal – effectively neither supporting nor condemning the coal plant. Yet without clear U.S. opposition, the World Bank loan is likely to go forward, and groups like Friends of the Earth are calling on the administration to affirmatively register a “no” vote. “The [South African coal plant] loan would be a disaster for the poor in South Africa,” reports Friends of the Earth, “and would lock their country into decades of dirty energy when clean, renewable alternatives exist.”

Though Eskom’s proposed coal plant is notable for its enormous size, the fight over funding for the plant is just one of the most recent manifestations of growing international concern over the World Bank’s role in financing coal plants and other fossil fuel projects which contribute to climate change. Currently, the World Bank is already supporting the construction of a major coal plant in India. In October of 2009, the bank approved a loan to another large plant in South Africa’s neighbor, Botswana. World Bank executives have defended the institution by pointing out that they are scaling up investments in renewable energy and energy efficiency projects as well. But environmental groups charge that as long as the World Bank continues to support massive coal plants like Eskom’s, the resulting increase in greenhouse gas emissions will eclipse the bank’s greener investments. South Africa has already become the most coal-dependent of all African nations, with 6% of the continent’s population accounting for over 40% of Africa’s greenhouse gas emissions.

Should the World Bank decide against funding the Eskom coal plant, it would send a clear signal that the bank is shifting away from support for fossil fuel projects. Eskom’s proposal is just the sort of project which only a few years ago would probably have received World Bank approval without a hitch – and the mere fact that this coal plant has been met with widespread opposition represents a change for the bank. However, in the end it may be the U.S. which determines whether the fourth largest coal plant on the planet will move forward or not.

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