The Obama administration, caught in an awkward bind between its own ambitions on climate change and Africa’s pressing energy needs, is facing the first test of its new guidelines discouraging coal-fired power projects in developing nations.
A coal-fired power station project in Limpopo, South Africa. The fate of the project may rest on a possible $3.75 billion loan.
This week, the World Bank will vote on a $3.75 billion loan to South Africa, most of it to help build the world’s seventh-largest coal plant. The bank’s own experts concede that the giant plant will “produce large quantities of carbon dioxide that will contribute to global climate change.”
But the bank’s largest shareholder — the United States — has enacted guidelines to push for “no or low carbon” ways of meeting the energy needs of developing nations that rely on international financial institutions.
Construction of the plant is well under way, so it is too late for the steps advocated in the Obama administration’s guidelines to ensure that coal is a last resort. Treasury Department officials have declined to say how the United States will vote when the loan is before the bank’s board on Thursday, with one describing the decision as “challenging.”
South African officials contend that the plant is desperately needed to help the country’s economy, the largest on the continent, and those of six neighboring nations generate growth and combat poverty. The loan is the first South Africa has sought from the World Bank since apartheid ended in 1994.
South Africa Energy Needs Collide With U.S. Policy
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