The United States has abstained on the vote by the World Bank’s board of directors on the proposed Eskom loan of $3,75-billion.
In a statement late on Thursday, the US Treasury said its decision reflected concerns about the effect on the climate 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 said 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.” – Sapa