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MNeagle
5th April 2010, 11:37 AM
April 5 (Bloomberg) -- Three U.S. lawmakers whose committees oversee World Bank policy and funding asked the institution for more environmental and social commitments from Eskom Holdings Ltd. before lending the South African utility $3.75 billion to build one of the world’s largest coal-fired power plants.

In a letter to World Bank President Robert Zoellick, Representative Barney Frank and Senators John Kerry and Patrick Leahy sought assurances that electricity to the poor will be extended, that the use of renewable energy will increase and that state-owned Eskom will retrofit its plants with more environmental protections.

The bank’s board is scheduled to vote on the Eskom deal April 8. The Washington-based poverty lender is seeking the backing of its shareholders for the loan, which environmental and civil rights groups oppose for pollution and distribution concerns.

“When the World Bank becomes engaged so prominently in a project of this nature, we believe issues of public policy that are within the bank’s development mandate should be specifically addressed,” the Democrats wrote in the March 26 letter obtained by Bloomberg News.

While recognizing the “urgent energy needs” in the region, “we cannot ignore the reality that our planet is hurtling toward potentially catastrophic climate change,” the lawmakers said in the letter, which states the 4,800-megawatt coal plant will be the world’s fourth-largest.

Committee Chairs

Frank chairs the House Financial Services Committee, Kerry chairs the Senate Foreign Relations Committee and Leahy chairs the Senate Appropriations Subcommittee on Foreign Operations. They said Zoellick should weigh their concerns about Eskom as he seeks money from the U.S. and other shareholders for the bank’s first capital increase in 22 years.

“As the Congress is asked to increase the U.S. contributions to the multilateral development banks, we must be sure that these investments are supporting 21st-century priorities,” Frank, Kerry and Leahy wrote.

World Bank spokesman Peter Stephens said the project will include “advanced super-critical technology and solar and wind power investments,” and the lawmakers have been kept apprised of what’s expected of Eskom.

“We’ve written a detailed response that highlights the development imperatives of the project as well as South Africa’s intention to spearhead the biggest grid-connected concentrated solar plant with storage capacity in the world and the biggest wind plant in Africa,” he said.

Powering Growth

South Africa needs to expand energy capacity to fuel its economic growth and supply neighboring African nations that buy its electricity. Eskom is seeking cash to fund a five-year, 460 billion-rand ($62 billion) expansion plan aimed at preventing a repeat of shortages that temporarily shut mines and aluminum plants in 2008.

South African Finance Minister Pravin Gordhan last week warned that his country won’t agree to any conditions to obtain the loan.

“South Africa, in 16 years of democracy, never has had to take any loans from the World Bank,” Gordhan told reporters in Johannesburg on April 1. “If it doesn’t come through we will cope. This is an opportunity for the World Bank to build a relationship with South Africa. We are quite optimistic” the loan will be approved on April 8.

The U.S. will abstain on the vote because it feels “on the defensive” on climate matters, South African Public Enterprises Minister Barbara Hogan told reporters in Pretoria on March 12.

Supporters

In a separate letter to Treasury Secretary Timothy F. Geithner, eight U.S. House members including one Republican urged the U.S. to back the loan, calling the power plant “critical to heading off an impending energy crisis in South Africa and the entire Africa sub-region.”

“We understand and share concerns about the multilateral developments bank’s active support for coal-fired power projects, but this project represents a truly unique situation, with mitigating circumstances that warrant broader consideration given its significance to the region’s development,” Representatives Gregory Meeks, Bobby Rush, William Lacy Clay, Jack Kingston, Donald Payne, Yvette Clarke, Maxine Waters and Sheila Jackson Lee wrote.

If awarded, $3.05 billion of the loan will be used to help fund the Medupi coal-fired power plant that Eskom plans to build in the country’s Limpopo province. The plant will generate power on schedule in 2012 even after technical problems and strikes delayed some of the development, the Public Enterprises Ministry said last month.

In addition, $260 million would go to investment in renewable energy and $485 million would be used for investment in low-carbon efficiency components, such as “road to rail coal transportation,” the South African government said in a letter posted on the Web site of its embassy in the U.S.

http://www.bloomberg.com/apps/news?pid=20601087&sid=av2DLY13Vb2E&pos=9

rob11woods
28th January 2011, 01:04 PM
In a letter to World Bank President Robert Zoellick, Representative Barney Frank and Senators John Kerry and Patrick Leahy sought assurances that electricity to the poor will be extended, that the use of renewable energy will increase and that state-owned Eskom will retrofit its plants with more environmental protections.

It is quite difficult to put your trust on the government especially when money is involved.