Call to stop loan to Eskom

2010-04-07 00:00

AN advocacy group based in Pietermaritzburg has spoken out against a proposed $3,75 billion World Bank loan to Eskom.

A decision will be made tomorrow and, should the loan be approved, Eskom will build the world’s fourth largest power station in Lephalale.

According to the power utility, the coal-fired Medupi power station will add 4 800 MW to the national grid.

However, groundWork, a non-profit environmental organisation, has sent a letter to the World Bank’s executive director in the hope of stalling or stopping the loan.

“The World Bank is notorious for funding projects which claim to be about poverty alleviation, but really aren’t,” said groundWork director Bobby Peek.

Peek said World Bank research indicates the organisation should no longer fund coal, oil and gas industries.

“They acknowledge those are not good poverty alleviation or climate strategies, but the World Bank still has a big portfolio of coal, gas and oil funding,” said Peek.

Despite environmental concerns, Eskom has cited the project as one that will raise the national GDP by 0,354% yearly. Lephalale’s GDP will grow at a staggering 95% as a result of the power station.

Word from Eskom, in the light of the rising national electricity demand, is that “the construction of Medupi power station will have a major impact on the lives and the economy of the community in Lephalale, as homes and a social infrastructure are planned to be developed to serve the thousands of contractors working on site”.

But Peek warned against “simplistic and foolhardy” thinking.

“To say that more electricity means more industry, which means a better economy, is untrue,” he said. “In the last 15 years we have had great retrenchments; there has not been an expansion of the workforce, despite increased industry.”

Peek said the increased electricity output from the new plant will do little for households. Instead, most of the electricity will be sold off to large corporations, such as mining houses, at preferential rates.

“Residents only use 17% of the national electricity and that is in no way going to expand,” said Peek.

He said there is little or no need for the new plant, and, if Eskom increases rates slightly for large industries, a saving of R2 billion a year could be used to provide electricity for households.



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