South Africa Secures
World Bank Loan
South
Africa has welcomed a decision by the World Bank to grant a
three point seven-five billion dollars loan, to develop a
coal-fired power plant that will boost power supply.
The loan, the first World Bank loan for South Africa since the
end of apartheid in 1994, was approved despite the lack of
support from the United States, Netherlands and Britain, which
abstained mainly due to environmental concerns.
Addressing emissions
South Africa, which is battling a chronic power shortage, has
said it would address the concerns raised over emissions. The
country is reliant on coal for ninety-five percent of its
electricity supply.
South Africa's national grid suffered a near collapse in early
2008, costing the country billions of dollars in lost output
across all sectors as Eskom enforced rolling blackouts.
Loan deployment
The loan will finance the Medupi power station, the country's
first large wind and concentrated solar power projects.
Medupi is part of several new power stations planned to boost
generation capacity to satisfy fast-rising power demand.
State owned power utility, Eskom has said it plans to invest
four hundred and sixty one billion rand to boost generating
capacity and diversify away from coal-fired power station.
Eskom has defended the 4,800 megawatt Medupi plant in the
northern Limpopo region, saying there is no immediate
alternative to easing the country's chronic power shortages and
ensuring power supplies to neighboring states.
The utility said the approval of the loan cleared the way for
the full construction of the Medupi power station, which is
expected to produce its first power by April 2012 when the first
of six 800 megawatt units will be commissioned.
The loan rate is at six month LIBOR with a zero point five
percent fixed margin and a variable spread of zero point
two-four percent, to be reset semi-annually. The maturity is
twenty-eight and half years with a grace period of seven years.
REUTERS/Williams/Yinka
