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Press Room:  For Immediate Release 
Explore, Enjoy and Protect the Planet

April 8, 2010

Virginia Cramer, Sierra Club, 804-225-9113 x 102
Bobby Peek, groundWork, +27-82-464 1383

World Bank Vote Gives Billions to Coal
United States Fails to Follow Own Global Warming Guidelines

The World Bank today approved a $3.75 billion loan to South African power utility Eskom to help build a 4,800 MW coal-fired power plant in Lephalale in the Waterberg. The funding would also facilitate plans for a second large coal plant in Witbank. The coal plants will be among the largest and most polluting worldwide.

"Twenty years from now, people will look back and see this loan as a missed opportunity to change the world for the better. Eskom and the World Bank have made a monumental failure to appreciate not only the dire circumstances that humanity finds itself in but also the possibility of alternative, cleaner and more efficient development. Today's children will judge them harshly," said Tristen Taylor, Project Coordinator of Earthlife Africa Jhb.

Though the US is the largest shareholder of the Bank, the Obama administration abstained from the vote to approve the loan, giving tacit approval to the coal plant funding. The decision goes against a coal guidance policy issued by the US Treasury during UN climate talks in Copenhagen which encourages the development and funding of no or low carbon energy sources.

"This doesn't fit.  Giving financial assistance to projects that dramatically increase global warming pollution is counter to everything else the Obama administration is doing to transition to a clean energy future," said Mark Kresowik, finance representative for the Sierra Club's Beyond Coal campaign.

Nearly 200 organizations from South Africa and around the world have voiced opposition to the loan, saying that it will contribute to energy poverty and environmental destruction. Residents of the affected South African communities filed a complaint with the World Bank's inspection panel earlier this week. Chairmen of three U.S. Congressional committees with control over World Bank funding also expressed concerns, writing World Bank President Zoellick last week to raise "serious questions" about the wisdom of granting the request as the world works to head off the worst impacts of climate change.

The World Bank has pushed aggressively to capture control of international funding for developing countries to address climate change, even as it rushed to approve this coal loan.

"The loan is just one example of how the World Bank funds polluting projects that destabilize the climate and perpetuate poverty. This should end misconceptions that the World Bank can be trusted with overseeing international funds aimed at solving the climate crisis," said Karen Orenstein of Friends of the Earth.

"The World Bank should be using its financial assistance to help developing economies leapfrog high carbon development and promote investment in clean and ultimately cheaper alternatives such as wind and solar," said Sunita Dubey of groundWork.

The coal plants proposed by Eskom are two of three proposed for the Waterberg area and would produce 25- 40 million tons of global warming pollution each year, tripling Eskom's CO2 emissions by 2018. The plants would operate without the latest pollution controls for sulfur dioxide, putting the health of African communities at risk. Eskom plans to sell the bulk of the power from the coal plants to industrial clients at deep discounts, while charging residential customers three to five times more for the remaining power.


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