World Bank approves $1 billion loan to help South Africa tackle power crisis

• 1 year, 29 days ago (2023-10-26)
• David Flin

Africa 320 Coal 296 Distribution 122 Transmission 191

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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.

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.