South Africa, Clean Energy, and The Power Of Banking

Original source: SimoleonSense.com .

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Synopsis (Via Foreign Affairs)

If the World Bank refuses to fund a controversial coal-fired power plant in South Africa, the most likely outcome isn’t more clean energy — but rather a financial arrangement that neglects it.

Introduction (Via Foreign Affairs)

A major showdown is under way at the World Bank over a coal-fired power plant under construction in South Africa, which if approved would be the largest and dirtiest investment project the bank has ever financed. The fight pits big developing-world governments and economic development advocates, who argue that the plant is essential to growth and poverty reduction, against those worried about climate change, who contend that the bank should not support carbon-spewing power.

The bank’s shareholders — primarily developed-country governments — are caught in between. Their vote on the $3.75 billion package, expected April 8, will not only determine the course of this one project, but will influence how global institutions balance their current core priorities with climate change going forward. The debate raging over this plant is a case-study in how multilateral organizations adapt (or don’t) their central missions to the emerging focus on climate change. How will these global heavyweights balance their primary goals — for the World Bank, enabling development — against the trade-off of pumping more carbon into the atmosphere? In this case, the bank’s shareholders should say yes now, but reinforce a cleaner future direction.

The fight over the Medupi plant, a 4.8-gigawatt behemoth — equal to more than 10 percent of South Africa’s current generating capacity, roughly equivalent to five nuclear plants — is unfolding against the backdrop of two crises. The first is a crisis in South Africa’s electricity sector. The country is plagued by chronic power shortages, which are only projected to get worse, crippling economic growth.

Click Here To Read: South Africa, Clean Energy, and The Power Of Banking