The World Bank approves a 3.75 billion dollar loan for a coal fired power plant in South Africa

[karynnj]

the World Bank approved a $3.75 billion loan to a South African company to build a large coal burning power plant. In the articles on it, several points were made:

1) The US abstained from the vote because of environmental concerns.

2) Kerry, representing SFRC, Leahy, representing Senate Appropriations Subcommittee on Foreign Operations, and Frank representing House Financial Services Committee wrote a letter with concerns about it.

3) Representatives Gregory Meeks, Bobby Rush, William Lacy Clay, Jack Kingston, Donald Payne, Yvette Clarke, Maxine Waters and Sheila Jackson Lee wrote a letter supporting it because of the needs of people to have power in that area.

Here are two articles on that:
http://www.businessweek.com/news/2010-04-05/u-s-lawmakers-raise-concern-about-world-bank-loan-to-eskom.html
http://www.nytimes.com/cwire/2010/04/08/08climatewire-us-to-abstain-on-south-african-coal-plant-51068.html

Kerry's comment on approval was:

“There are better ways to promote urgent energy access in the developing world without exacerbating the looming threat of catastrophic climate change which will ultimately hit Africa and the developing world the hardest,” Sen. John Kerry (D-Mass.) said in a statement released Friday morning.

“Moving forward, the World Bank should be leading the way by leveraging its funding and broad expertise to promote new, low carbon footprint energy sources that mitigate climate change.”

http://thehill.com/blogs/e2-wire/677-e2-wire/91329-kerry-knocks-world-bank-coal-loan

This issue was one of several discussed at this hearing:
Kerry asked Tim Geitner on this dilemma starting at about 46 minutes in. His not voting for the loan was consistent, if a bit weak, compared to his answer to the committee.

http://foreign.senate.gov/hearings/hearing/20091117_3/

This is an interesting situation where both the people against this and the people for it are motivated by things that we would agree with - though I agree with Kerry, Leahy and Frank as this is likely not in SA's long term interest.

[Cha]

1. KR

Agree with Kerry et al but what can they do?

[karynnj]

2. Nothing on this but, the interesting thing is that the US abstained

rather than voted for it. That is a change from the past. That's kind of the approach taken in this article. (It is nice to find a link more Pollyannaish than I am.)

While we may have lost this fight, a few pieces of news show that the US Treasury and the World Bank didn’t take the decision lightly, and will consider future coal projects more carefully:
* The US Treasury sent a letter indicating that it abstained from voting on the loan, condemning the plan, and raising “…concerns about the climate impact of the project and its incompatibility with the World Bank’s commitment to be a leader in climate change mitigation and adaptation.” http://treasury.gov/press/releases/tg635.htm
* Netherlands, UK, Italy and Norway also abstained from the vote, which is unprecedented.
* Powerful US legislators Patrick Leahy, John Kerry and Barney Frank raised concerns about the loan and other fossil fuel loans moving forward.
* Civil society groups from around the world effectively shined the spotlight on the World Bank’s poor lending practices and South Africa’s corrupt and mismanaged energy sector.

http://itsgettinghotinhere.org/2010/04/08/south-africa-dirty-loan-approved/

[Cha]

3. That is encouraging and I'll take

anything I can get because we are at the crossroads!

[karynnj]

4. There's actually more hope in Senator Kerry's full statement

WASHINGTON, D.C. – Today, Senate Foreign Relations Committee Chairman John Kerry (D-MA) issued a statement following the World Bank vote on the Eskom power project:

“The Eskom project and America's decision to abstain must mark the end of the era of abundant international subsidies for dirty coal-fired power plants. There are better ways to promote urgent energy access in the developing world without exacerbating the looming threat of catastrophic climate change which will ultimately hit Africa and the developing world the hardest. Moving forward, the World Bank should be leading the way by leveraging its funding and broad expertise to promote new, low carbon footprint energy sources that mitigate climate change.

“The good news is that this project triggered a debate that already resulted in improvements since South Africa’s submission. South Africa, working with the World Bank and Treasury, has included additional renewable and energy efficiency components. Perhaps most importantly, South Africa has now publicly declared its intent to devote $1.25 billion of the remaining funding opportunity to emission reduction efforts."

http://kerry.senate.gov/cfm/record.cfm?id=323709

This really is good news, because I think the previous norm was to simply to approve them if the numbers and financial stuff was what they wanted. This likely means that Geitner was sincere in the exchange he had with Kerry in the committee hearing I linked to in the OP. (The question and answer were good.)