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US To Finance Dirty Coal Power In South Africa

US To Finance Dirty Coal Power In South Africa

Whether you’re an American taxpayer, a South African or just an environmentally-conscious world citizen, the fact that an official federal agency of the US government has just agreed to help finance a giant new coal-fired power plant in South Africa is more than troubling.

Ex-Im Bank loan approved
On Monday, South Africa’s state-owned electric utility, Eskom, announced that the Export-Import Bank of the United States (Ex-Im Bank) has given its initial approval for an $805 million (R5.78 billion) loan to help Eskom continue to build the Kusile power plant in the Mpumalanga Province. The Ex-Im Bank is the official export credit agency of the US federal government, but in practice it seems to operate quite independently of governmental oversight.

A poor climate change record
In the past, the agency has been criticised for its support of unpopular fossil fuel and nuclear energy projects, providing large loans to, among others, the China National Nuclear Power Corporation, the 4000 megawatt Sasan coal power and mining project in India, and a Colombian oil refinery. Between 2003 and mid-2010, renewable energy projects constituted less than 1% of its financed projects.

In 2009, the Ex-Im Bank settled a legal case brought against it by Friends of the Earth and others who claimed that the bank was providing financial assistance to fossil fuel projects without properly evaluating their climate change impacts. As part of the settlement agreement, the bank vowed to include an evaluation of CO2 emissions as part of the qualifications for future projects. That particular commitment appears to have fallen by the wayside in the South African loan approval.

A giant new source of CO2 emissions
Expected to emit an estimated 36.8 million tonnes of CO2-equivalent per year once it is completed, the 4800 megawatt Kusile coal power plant is forecast to increase South Africa’s greenhouse gas emissions – already the biggest in Africa – by nearly 10%. In addition, it’s projected to consume more than a billion gallons of water annually and release various health-threatening pollutants into the air.

Numerous civil society and environmental organisations, both from within and outside of South Africa, have campaigned vigorously against Kusile and another massive new coal power plant called Medupi that Eskom is building in the adjoining Limpopo Province. The South African government has indicated that it is not in a position to contribute any further funds to these projects. In the case of Medupi, additional financing is coming from the World Bank. The final vote on the Ex-Im Bank’s loan for Kusile is expected in approximately 35 days after a mandatory Congressional notification period.

Renewable energy options neglected
South Africa has extensive coal reserves and is already generating more than 90% of its electricity supply by burning this fossil fuel. Does it really need even more coal-fired power plants? By allowing one of its federal agencies to fund this dirty, climate-changing technology, the US government is helping to ensure that South Africa remains hooked to its carbon addiction, reducing its capacity and opportunity to develop clean, sustainable and renewable power sources, particularly solar and wind energy, which are plentiful, but almost entirely untapped.

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Andreas is a book shop manager and freelance writer in Cape Town, South Africa. Follow him on Twitter: @Andreas_Spath

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55 comments

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5:13AM PDT on Jun 21, 2011

Irresponsible! South Africa is so beautiful!

10:50AM PDT on Jun 11, 2011

Hopefully this power plant doesn't happen...it'll cause more damage than doing good.

12:12PM PDT on Jun 2, 2011

@ Kenneth M. Please explain your comment. What do you classify as a lot of cars? We may not have as many cars as the USA, but we are also a smaller country than the USA. Besides this, there are little to no regulations in the developing world to require owners to maintain their vehicles in good running order, meaning that the resulting emissions are far worse than in areas such as Europe.

Try not to post comments based on speculation. Trust me, there are plenty of cars. To imply that having fewer cars means we are allowed to increase our emissions, is completely missing the point. The goal of every single nation and every individual should not be to keep emissions under a certain limit, but to keep emissions at the lowest level possible.

@Yvette T. I wish it were that easy in places such as this. South Africa also has a very high tax rate. However, we can't simply demand things from our government. They don't listen, besides the fact that after the majority of tax money has been squandered on luxury cars and lavish parties, there is little money left for the important things such as clean energy.

This is an immature nation you're dealing with, and if you offer us funding for a power plant that will make use of the coal that we can cheaply get, then we won't turn down the opportunity. Once our leaders begin to see beyond their own pockets and liberties, then maybe they'll work towards a greater good. Until then, developed nations should not be encouraging our dirty ha

5:42AM PDT on Jun 2, 2011

Seems like S. Africans can't resist the dirty American dollar?

5:52PM PDT on Jun 1, 2011

This is real bad news. I'm sorry to hear that the USA has a hand in financing a dirty coal plant in South Africa. Solar, wind, and geothermal power could supply all of South Africa's electricity if the government would implement a strong policy to make that happen.

2:13PM PDT on Jun 1, 2011

In relation of the environment, the man is getting more and more aimless. It's sad but it's true. Thanks by the article.

12:56AM PDT on Jun 1, 2011

... when South Africa can go 100% renewable: http://www.care2.com/news/member/140535861/2820328 .

Appropriate renewable energy is better - the coal plant should be stopped.

11:06PM PDT on May 31, 2011

sad

9:02PM PDT on May 31, 2011

It's ok over there they don't have that many cars

8:16PM PDT on May 31, 2011

We pay so much in taxes and must demand that green energy and greening our planet is a priority now.

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