Cocking a snook at the concerns of international community and objections of environmentalists, the World Bank has approved a $ 3.75 bn loan to South Africa's state-owned Eskom Company to to set up world’s largest coal plants.
A large number of grassroots movements and environment activists have raised concern over the proposed Medupi Station, which they believe would hurt the environment and do little to help end poverty.
The plant would emit 25 m tonnes of carbon dioxide a year and come as a barrier in South Africa’s goal to curb future carbon emissions.
However, the Bank said that the loan was approved in view of acute power shortage in the country. A World Bank official said, “Without an increased energy supply, South Africans will face hardship”.
Countries like America, Britain, the Netherlands, Italy and Norway expressed their reservations about the approved loan and abstained from voting, the traditional method of dissent on the board of the Bank which operates by consensus.
The US treasury department said the loan was incompatible with the Bank's stated commitment to promoting low carbon economic development.
The vote by the World Bank had been widely seen as a test of the Obama administration's commitment to new guidelines put forward barely three months to shift aid to the developing world away from coal and fossil fuels to less polluting energy sources.
The Obama administration had come under strong pressure from Democratic leaders in Congress as well as environmental organisations to try to block the loan.
