HomeIndustry SectorsFinance and PolicyWorld Bank verdict due tomorrow

World Bank verdict due tomorrow

7 April 2010 – Opposition to Eskom’s loan from the World Bank for $3.75 billion continues to mount after a letter was written to the bank seeking increased environmental and social commitments from Eskom.  There were also reports from the UK that the British government may block the loan because of pre-election voting concerns.

The 24 member board of the World Bank is due to meet on Thursday 8th April to discuss the loan application.  There has been extensive lobbying against the loan by environmental campaigners concerned that multilateral finance is continuing to be used for high-carbon projects.

However, it has been revealed by Minister Dipuo Peters, Minister of Energy, that there is no plan B if the loan application to the World Bank fails

It has previously been indicated that the US would abstain from voting, while France supported the vote, but Peters said that the government had received no further information on how the voting would go.

Opposition to the loan comes mainly from the US, and opponents of the loan have requested the bank seems assurances about issues around electricity provision to the poor, increased use of renewable energy and retrofitting facilities with more environmental protection.  However in another letter, addressed to US Finance Minister, Timothy Geithner, members of the House of Representatives urged approved of the loan, as it was "critical to heading off an impending energy crisis in South Africa and the entire southern Africa sub-region".

"We understand and share concerns about the 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," the letter read.