Eskom loan: US abstains from vote

2010-04-09 08:00

The US has abstained on the vote by the World Bank’s Board of Directors on the

proposed Eskom loan of $3,75 billion (about R27 billion).


Late on Thursday, the Treasury said that this reflected concerns

about the climate impact of the project and its incompatibility with the World

Bank’s commitment to be a leader in climate change mitigation and

adaptation.


“At the same time, the United States recognises South Africa’s

pressing energy needs and the lack of near-term feasible low-carbon

alternatives.”


The Treasury added that South Africa and the region faced urgent

energy needs to promote economic growth and address critical challenges.


“We recognise that South Africa faces limited options that could

provide the required energy base for South Africa and the region in lieu of the

project, and that there is a lack of alternative private financing options in

the wake of the financial crisis.


“We also recognise that if South Africa’s base load power needs are

not met, the country’s economic recovery will suffer, adversely impacting

electrification, job creation, and social indicators.”


However, the Treasury said the US was concerned about the project

since it would produce significant greenhouse gas emissions, and uncertainty

remained about future mitigation efforts.


“Without actions to offset the carbon emissions of the Medupi

plant, the project is incompatible with the World Bank’s strategy to help

countries pursue economic growth and poverty reduction in ways that are

environmentally sustainable.”

 

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