The World Bank Approved a $1B Loan to Help Blackout-hit South Africa’s Energy Sector

FILE — A coal truck, right, passes the coal-powered Duvha power station, near Emalahleni (formerly Witbank) east of Johannesburg, Thursday, Nov. 17, 2022. The World Bank has approved a $1 billion loan for South Africa to help it address an energy crisis that has peaked this year with the country’s worst electricity blackouts. It has forced South Africa to lean more heavily on its highly polluting coal-fired power stations. (AP Photo/Denis Farrell/File)

BY GERALD IMRAY

8:34 PM EDT, October 25, 2023

CAPE TOWN, South Africa (AP) — The World Bank approved a $1 billion loan for South Africa on Wednesday to help it address an energy crisis that has peaked this year with the country’s worst electricity blackouts. The energy problem has forced the country to lean on its highly polluting coal-fired power stations.

South Africa has experienced scheduled, rolling blackouts for months because of problems generating enough electricity for its 62 million people. The state-run power utility, Eskom, generates approximately 80% of the country’s electricity through its coal stations, but they have failed to meet demand due to mismanagement, corruption and regular breakdowns.

South Africa’s commitment to its climate change targets are in danger of being affected in the short term, with President Cyril Ramaphosa announcing in April that it may delay shutting down some of its coal stations because of the electricity supply problems.

“The loan endorses a significant and strategic response to South Africa’s ongoing energy crisis, and the country’s goal of transitioning to a just and low carbon economy,” the World Bank said.

While Africa contributes the least to climate change and is the continent affected the most, South Africa is Africa’s most advanced economy and the world’s 16th-largest emitter of greenhouse gases overall. It is 45th per capita based on 2019 data, according to Climate Watch.

The South African government has said it needs nearly $80 billion over the next five years to fund its transition to greener energy sources.

It has already received a $439.5 million loan from the World Bank to help convert a former power station into a renewable energy provider. The Komati power station was decommissioned last year, but its story is an example of how developing countries desperately need money to finance their change to greener energy sources to help meet climate change goals.

The World Bank has been urged to provide more funding for African countries facing climate change and other problems.