Earth Equity News

World Bank Controversy over Funding Coal Plant in South Africa Exacerbates Divide on Climate Policy. By Lesley Wroughton, Reuters, March 7, 2010. "The United States and Britain are threatening to withhold support for a $3.75 billion World Bank loan for a coal-fired plant in South Africa, expanding the battleground in the global debate over who should pay for clean energy. The opposition by the bank's two largest members has raised eyebrows among those who note that the two advanced economies are allowing development of coal-powered plants in their own countries even as they raise concerns about those in poorer countries. While the loan is still likely to be approved on April 6 by the World Bank board, it has revealed the deep fissures between the world's industrial powers and developing countries over tackling climate change. Both camps failed to reach a new deal in Copenhagen in December on a global climate agreement because of differences over emissions targets and who should pay for poorer nations to green their economies.

"Some $3 billion of the loan to South African power utility Eskom will fund the bulk of the 4,800-megawatt Medupi coal-fired plant in the northern Limpopo region and is critical to easing the country's chronic power shortages that brought the economy to its knees in 2008. The rest of the money will go toward renewables and energy efficiency projects. The battle playing out in the World Bank was prompted by new guidance issued by the U.S. Treasury to multilateral institutions in December on coal-based power projects, which infuriated developing countries including China and India."