By Art Nevins
Source: OpEdNews.com
The World Bank is considering whether to give a $3.75 Billion loan to South African Power Company Eskom to build a new “clean coal” power plant, which would be the fourth largest coal powered power plant in the world. The loan is of highly contentious debate and the focus of intense lobbying by both sides. The South African government and the World Bank seek to present the loan as a pillar of finance for development. South African Minister of Public Enterprises said that if the loan is not given, “We can essentially say goodbye to our country” and the economy.
South African environmental activists Makoma Lekalakala and Caroline Ntaopane have spent the previous week speaking with various World Bank representatives, Congress, and the Treasury to prevent the disbursement of the loan. They are extremely concerned about the long term costs of the loan, not only in terms of dollar amounts but also the environmental damage the coal plant is surely to inflict on the whole African continent. Further causing concern and degrading the environment are the additional coal mines to be built in conjunction with the new power plant.
The World Bank and others hold that if the loan is not given, the lack of energy resources will hinder any development plans for South Africa in the future. Caroline and Makoma however, forcefully argue that South Africa’s poor were never consulted about their interest in the plant, and that most of the energy produced will go towards assisting major corporations and not the people. The poor people will pay more for more problems. It is apparent that the plant is being used to serve the corporate interests and not really the people of South Africa. It is of note that many unions, including the coal miners’ union, have come out against the loan as well as the Council of Churches in South Africa. Those closest to the people know that the loan will not benefit the people of South Africa.
While there is much pressure on the World Bank to give the loan, the institution should vote against it. Part of the Bank’s mission is to work sustainable development of struggling countries, yet in the past their strategies to implement development have been outright harmful towards the world’s poorest. While the World Bank has admitted some mistakes and claims to be seeking new approaches of development, this loan would not be it.
The “clean coal” (which itself is disputably clean) power plant would violate their own standards of their “Development and Climate Change Strategy Framework” for environmental development. It would contradict the findings of the Extractive Industries Review which determined that the Bank should phase out fossil fuel financing. It will not be sustainable in the long term for the country. This loan stands as just one more example of a long chain of examples of bad lending practices on behalf of the World Bank and many multilateral institutions and must be stopped. These unsound practices have led to the accumulation of environmentally harmful, poverty-causing debts in many poor countries and the trend needs to be reversed, not continued.
At this point it is likely that the US will abstain from taking a position on the vote, which itself is as a matter of crucial indecision. A firm stand on the issue will send a strong message to other world leaders and likely convince many that the coal plant is the wrong move in a time when action on climate change needs to be a top priority. France and Germany have also hinted at an interest in passing the loan and unless the situation changes the loan will likely go through. We encourage you to stand with Makoma, Caroline, and the people of South Africa and support them in this effort.
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