Eskom loan spells ‘problems’

2010-04-13 12:45

The World Bank will bestow economic and environmental problems on

South Africa through the granting of a $3.75 billion (R27 billion) loan to

electricity parastatal Eskom, social movement Jubilee South Africa said on


The organisation said: “The large size of the loan, as well as the

signal that the granting of the loan sends to other lenders to make further

loans, will have serious economic repercussions.”

Designing problems

It said the World Bank was now not only a designer of the country’s

social and economic policies, but a financier as well.

South Africa was standing at the threshold of the problems that the

World Bank and International Monetary Fund (IMF) had bestowed on other southern

countries for many decades.

The social movement said the sanctions campaign during apartheid

had actually shielded South Africa from the damage that the policies of the

World Bank and IMF caused in other countries.

“This supposed punishment was a blessing in disguise for

post-apartheid South Africa, in that the country, unlike its counterparts in the

rest of Africa and the South, had limited obligations to these agencies.”

Jubilee said that while the World Bank loan to Eskom was being

promoted as supporting development, “nothing could be further from the


The loan was based on an intensification of coal-fired power.

“This requires the expansion of coal mining, entailing the further

dispossession of people from their land,” Jubilee said.

“Coal-fired power stations need highly purified water, but mining

pollutes water, so people’s water needs will also be sacrificed.”

The local effects would be exacerbated by the impact of the loan on

carbon emissions and global warming, the impact of which was felt

disproportionately in the south as altered weather patterns impacted on


“The privileging of capital-intensive power stations over more

extensive small-scale renewable projects also impacts negatively on employment

opportunities,” Jubilee said.

Moreover, the negative impacts of local and global environmental

destruction would be passed on to future generations.

“It is becoming increasingly evident to all that sustaining the

environment and engaging in appropriate development go hand in hand. “The

collaboration between the World Bank, government and Eskom towards the granting

of this loan represents an attack on both the environment and the people.”

Jubilee said it was on this basis that it opposed the loan “and,

more broadly, any form of collaboration between South Africa and the World


Indeed, this loan is another glaring example of why the World Bank

should be shut down, Jubilee said.

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