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World Bank approves $1 billion loan to help South Africa tackle power crisis
- 1 year, 3 months ago (2023-10-26)
- David Flin
The World Bank has announced that its board has approved a $1 billion loan to help South Africa reform its energy sector, as the country tries to overcome regular power cuts that have curbed economic growth.
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The World Bank said it wants to support the country’s reforms to split struggling power firm Eskom and to transition to a low-carbon economy. Eskom’s coal-fired power stations currently routinely break down, leading to outages of up to 10 hours a day. According to Reuters, several power plants breached government emissions regulations earlier this year.
Marie Francoise Marie-Nelly, the World Bank’s Director for South Africa, said that the reforms the government had launched would: “Benefit the people of South Africa – particularly the most vulnerable households – the economy, the environment, and advance the energy transition.” The World Bank said its Development Policy Loan would contribute to a gradual reduction in water and air pollution by reducing the reliance on coal for power generation.
In 2019, South Africa’s government pledged to split Eskom into three subsidiaries – transmission, generation, and distribution. In February 2023, the government agreed to take on $13.3 billion of Eskom’s debt, more than half its total debt, which was at risk of default.