CAPE TOWN, March 15 (NNN-BUANEWS) — If the World Bank chooses not to approve a 3.75-billion USD loan to help build two new power stations in South Africa, “we can essentially say goodbye to our country”, says Public Enterprises Minister Barbara Hogan.
Emphasising that the government remained committed to renewable energy, Hogan said here last Friday South Africa and its Southern African Development Community (SADC) neighbours were currently experiencing an energy deficit which had the potential to constrain economic growth.
“If there is a vote against it (the loan), it will be the most unfortunate thing to have happened against the country’s economic development,” she said, while stressing that it was not true that if the loan was approved, South Africa would effectively be handing over control of its economic policy-making to the World Bank.
The finance from the World Bank, she said, was in the form of a specific investment loan, which unlike the Bank’s development policy loan, did not come with any requirement that the country receiving it put in place policy requirements such as structural adjustments.
Dispelling fears that if approved, the loan would effectively be funding “dirty energy”, Hogan said the two new power stations planned by national power utility Eskom — Medupi and Kusile — had been designed by the utility using the best proven technologies to minimise carbon emissions.
In addition, the two power stations would also use less water as they would be dry-cooled and would be energy efficient as they would operate at higher steam pressures and temperatures.
The coal-powered stations, which had been planned within the country’s carbon mitigation strategy, had also been designed to be carbon-capture-space ready.
Hogan said a decision was due to be taken in early April by the World Bank on whether the loan would be approved or not.
She said the United States had indicated itr would not vote against the loan, but would abstain, as they were under considerable pressure at home while, the French and British had said they were in favour of the loan.
She said several petitions put out contained inaccurate information, such as that the government planned to build 40 new coal-powered power stations.
The 3.75 billion USD loan sought from the World Bank forms part of Eskom’s investment programme which aims to expand its power generation capacity by about 50 per cent from 40,000 megawatts (MW) to 80,000 MW.
The loan will also include 485 million USD for investment for low-carbon energy efficiency components such as road- to-rail transportation and power plant efficiency improvements, which Hogan said would be a major step towards achieving the country’s long-term low emission plan.
In all, some 260 million USD of the World Bank loan would be used to help fund investments in renewable energy, including 100 MW of wind-generated power and 100 MW of concentrated solar power projects.
Hogan said in addition, the government had developed other initiatives towards developing greener energy, including the renewable energy feed-in tariffs for the renewable sector and the introduction of a 2.0 cents per kilowatt-hour levy on electricity generated from non-renewable sources.
She said the government had also cancelled a smelter project at Coega precisely because it was concerned about the energy usage of smelters.
The Department of Energy’s second Integrated Resource Plan, which would be promulgated after June, would define the country’s power portfolio beyond 2013, she said.
The plan would help to ensure that the country had energy security, was taking into consideration climate change effects and that it was able to finance its energy investment needs.
“South Africa is fully committed to renewable energy as a significant element of the energy mix,” said Hogan, who cautioned that time would be needed to ramp up these investments.
Meanwhile, Energy Minister Dipuo Peters said the country had taken several initiatives to reduce carbon emissions, including the compilation of a carbon geological atlas to locate potential geological storage sites for carbon capture; and a partnership between the government and the Clinton Foundation to develop a solar energy project.
Peters said the Department of Public Works and her department were also working on ways to make government buildings less carbon intensive. — NNN-BUANEWS
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