/ 7 April 2010

Eskom loan: Govt ‘mindful’ of Chancellor House concerns

Government is “mindful” of concerns raised about the Chancellor House-Hitachi contract related to Eskom’s loan application to the World Bank.

In a 12-page statement issued through the National Treasury on Wednesday, government responded to questions on Eskom’s $3,75 billion loan application to the World Bank which — if granted — would go mainly towards the construction of the coal-fired Medupi power station.

The ANC owns a 25% share in Hitachi through its investment arm, Chancellor House, and Hitachi had been awarded the tender to build boilers for the Medupi power station.

Government said it would continue to “engage” with all concerned parties “on this important question” with a view to having a “constructive dialogue”.

“We will ensure that we have a transparent framework to deal with matters such as these,” it said.

Some parties had called for the World Bank to make the loan conditional on the ANC divesting its stake in Hitachi so that the ruling party would not benefit from it.

Regarding the question of what measures South Africa would take to offset the carbon emissions from Medupi, government said the country’s plan for reduction in carbon emissions was not based on an offset structure.

Rather, the plan focused on achieving country emission reductions which were consistent with the Long Term Mitigation Scenarios adopted by government in 2008.

“The initiatives by government should not be read with offsets in mind but rather be seen as country-planning that has the potential to alter the pace and path of emissions and in moving towards sustainable development, whilst ensuring stability of the region in general.”

Government said through the Clean Technology Fund, it would look at concentrated solar power, wind energy, solar water heaters and energy efficiency. –Sapa