World Bank Under Criticism For Loaning $3.75 Billion for Coal Plant

It now seems that the World Bank has just approved a very controversial $3.75 billion loan to build one of the world’s largest coal fired power plants in South Africa just earlier this week. This loan defies international protests and sharp criticism from the Obama administration that the project would fuel climate change.

This Medupi power station, which will be operated by South Africa’s state owned Eskom company, was fiercely opposed by an international coalition of environmental activists. People from the United States, Britain, Italy, Norway, and the Netherlands all oppose the opening of this coal power plant.

Right now it is said that this coal power plant would put out about 25 million tonnes of carbon dioxide a year and would prevent South Africa from meeting its promise to try and curb future emissions. The World Bank said that it has acted to help South Africa escape a crippling power shortage. The World Bank’s vice president for Africa said that, without increased energy supply, South Africans will face hardship for the poor and limit economic growth.

In a statement, the US treasury department said that the loan was incompatible with the bank’s stated commitment to promoting low carbon economic development. They said that they expected that the World Bank will not bring forward similar coal projects from middle income countries in the future without a plan to ensure that there is no net increase in their carbon emissions.

However, World Bank officials said that the strong wording of these statements did not carry over to the Board’s discussion to give the loan. They said that it was not an easy decision. Everybody recognized the concerns about climate change, but this was a balancing act.