17 March 2010
South African activists Caroline Ntaopane and Makoma Lekalakala take on the World Bank's proposed loan to Eskom.
Source: E&E News
By Lisa Friedman, E&E reporter
For Caroline Ntaopane, the World Bank's plan to loan South Africa $3.75 billion for a new coal-fired power plant is personal.
The South African mother of two stepped into the world of environmental activism when her young daughter developed respiratory difficulties. Worried about the apparent increase of health problems in their town of Sasolburg, Ntaopane and others began monitoring and protesting pollution from the local power station.
Now Ntaopane is on the front lines of a fight to block the construction of a new 4,800 megawatt coal plant in her country. She and another activist, Makoma Lekalakala, traveled to Washington this week to make their case before the World Bank, the Obama administration and members of Congress -- and to urge the U.S. to lead the opposition to the controversial project.
"I'm not an intellectual. Sometimes I don't even understand the words that they are using," Ntaopane, 32, said of the discussions with energy experts over the loan to South Africa's state-owned utility company Eskom. But, she said, "These decisions affect me. It's personal, because it's what we are living. It's what we are eating and it's what we are breathing. It affects our life every day."
The visit is the latest in a fierce lobbying blitz from both sides in the heated debate over the Medupi plant. The World Bank initially planned for a a decision in late March, but recently pushed the board meeting to April 8. Bank officials chalked up the delay to simple scheduling conflicts, but sources say board's executive directors -- particularly Europeans -- are facing mounting pressure to oppose the project and some governments still have not decided how they will vote.
Meanwhile the South African government has put its full weight behind the loan, arguing that the Medupi plant is critical to the country's development. At a press conference last week, South Africa's public enterprises minister Barbara Hogan warned that the country's economy depends on having a secure supply of electricity.
'Say goodbye to our economy'
"If we do not have that power in our system, then we can say goodbye to our economy and to our country," Hogan said. "This is how serious this thing is."
In many ways the fight over the Medupi plant has become a proxy battle in the global climate change debate. Environmentalists are pushing the World Bank to stop lending for fossil fuel energy projects. Bank officials, in turn, argue that coal and other dirty energy is still the cheapest and fastest route to powering those without access to electricity.
Leaders of developing countries are making a strong case as well that they have a moral right to the same energy sources that helped enrich America and Europe. They argue Western countries concerned by rising emissions should clear out some carbon "space" by shutting down some of their own power plants. Many are suspicious that the World Bank's expanding role in funding climate change mitigation will translate into restrictions for developing countries wealthy nations accused of causing global warming won't face.
In the midst of all this, the U.S. is trying to reconcile World Bank loans with climate change concerns. Last year the Obama administration ordered its World Bank Group board members to take greenhouse gas emissions into consideration when they vote. New guidelines call on the U.S. to approve coal plants only if the World Bank is unable to secure additional funding to pay for a lower-carbon option.
Yet if the U.S. votes against the Medupi project, it faces a potential backlash from South Africa and could face accusations that it is blocking the country's development.
"This would be a major affront to South Africa," a senior World Bank official said. "No matter how you turn this Eskom project, you hurt something. It's really difficult."
Meanwhile, it appears that the financing package itself is also going through some changes. A World Bank spokeswoman confirmed Tuesday that the South African government has temporarily withdrawn its request for $250 million in funding from the bank's Clean Technology Fund (CTF) -- a program aimed at mitigating climate change -- to support the utility company's low-carbon strategy.
Sources inside the World Bank said officials from the U.S., U.K. and Germany expressed serious concerns about the public relations effect of connecting any climate change funds to the Eskom loan.
U.S. could abstain
Under the terms of the overall loan, about $3 billion will go for the construction of the power plant, which will be the first in South Africa to use cleaner super-critical technology. And about $260 milllion will fund wind and solar projects, and $490 million will go toward transportation improvements.
A World Bank spokeswoman noted that the renewable plans include construction of a 100 megawatt solar power plant that is the largest grid-connected solar project in any developing country; and a 100 megawatt wind facility matched in size only by one other World Bank project in China.
Treasury officials have declined to advertise how the U.S. will vote on Medupi. South Africa's Hogan was widely quoted last week saying she had assurances the U.S. would abstain -- a position that would allow America to go on record with its objections to the plant while still allowing the project to go forward. A spokeswoman yesterday denied that, issuing a statement saying it was not in a position to comment because the project has not yet been completed.
But, a spokeswoman added, "Given the concerns raised, we are encouraging the World Bank and the South African government to address issues related to the environmental soundness of the project and enhance its developmental impact."
Meanwhile in a whirlwind of meetings with World Bank executive directors and members of Congress and their staffs, Ntaopane and Lekalakala spent the week insisting to lawmakers that poor South Africans are not likely to see much of the new Eskom energy.
"We're talking about benefiting poor people, but those poor people have never been consulted," Ntaopone said. "It's very important to say that we need energy, but it's time to look at new models."
Copyright 2010 E&E Publishing, LLC. Reproduced with permission. www.ClimateWire.com.
Read more
$3.75 billion proposed loan to Eskom (BIC website)
BIC's World Bank Energy Strategy Review webpage
see also
World Bank convenes multi-stakeholder energy consultation in DC, by Chad Dobson and Rebecca Harris, March 11, 2010 (Huffington Post website)
The World Bank and Eskom: Banking on Climate Destruction, by David Hallowes, GroundWork, December 10, 2009 (Acrobat pdf, 925 KB)