The World Bank is yet again on the brink of providing a loan that will have only negative effects for the poor and the environment. South Africa faces a power crisis at the moment and it is looking to the parastatal Eskom, which in turn is looking to the ever-willing World Bank to provide a US$4 billion loan. This loan is primarily intended to finance the world's fourth biggest carbon-emitting power plant and fund similar projects that will supposedly address the issue of power in South Africa. At the end of the month we will know whether or not the World Bank will go ahead with the contract - one that will reiterate its neglect for the poor, apathy for environmental issues and ongoing affair with big business. In South Africa and around the world the movement against this proposed loan is gaining momentum, and critics of the contract have been imploring the global loan sharks to cancel the deal because of the adverse effects that it would have on the already burdened region.
Whilst Eskom may claim that the new coal initiative is the only way to resolve the crisis, others have proposed much simpler solutions that the powers-that-be tend conveniently to overlook. In South Africa at the moment the 138 biggest corporations in bed with Eskom pay as little as a sixth of the price for their electricity as the average household does. Rectifying this unjust system, as recommended by economist Patrick Bond, would hugely assist efforts to deal with the power crisis. When in private hands, as we have seen so often in the past, services become far from public in their focus. And as if the situation for the poor communities couldn't get any worse, Eskom have proposed a 35 per cent increase in costs every year for the next three years to help remedy the crisis. Average township household electricity bills are predicted by Eskom to rise from US$47 to an astonishing $132 over the next 3 years. The poor are being burdened with an electricity crisis that has been created by big business, whose insatiable appetites will be satisfied by the new power plant, for the time being. At the same time serious health concerns for those (obviously poor) communities surrounding the new power plant and new coal mines have been voiced, as well as the fact that Eskom is a struggling company that made huge losses last year. Through miscalculations the company lost almost half of the amount that they are requesting from the Bank.
Moreover, at the climate summit in Copenhagen, South Africa was supposedly on the frontline of the movement of nations demanding genuine action on climate change, with its Government considering itself a champion of green initiatives. Over the last few weeks, however, their position has come under intense scrutiny as, aside from the effect the contract will have on the poor, it will seriously undermine efforts to address climate issues. In order to supply the new generators, Eskom intends to create 40 new coal mines. South Africa aims to reduce its emissions by 18 per cent by 2020, but if this new initiative goes ahead, that figure would seem to be increasingly illusive.
At the end of March the World Bank will state its position and the global movement campaigning to keep coal in the hole will see if they have done enough to deny a contract that will leave South Africa financially and environmentally indebted, whilst the poor foot the bill.