Eskom and the government are dodging commitments made to the World Bank when they borrowed $3.75bn (R38bn) to build the Medupi power station, according to civic and environmental groups.
The World Bank, which came under criticism in South Africa and internationally for bankrolling a coal-fired power station in the face of global climate change, put conditions in the loan agreement to ensure Medupi would conform to the highest standards of environmental management.
One of these was that the power station, still under construction, would be fitted with flue-gas desulfurisation equipment to remove toxic sulphur dioxide from the power station’s emissions.
None of Eskom’s power stations has this equipment, which is expensive and uses a lot of water.
The World Bank said in loan agreement documents that it had “insisted on, and obtained, a legal commitment by Eskom to install flue-gas desulphurisation at Medupi”.
The Departments of Finance and of Public Enterprise, as government guarantors of the loan, signed an agreement with the World Bank in 2010 committing to “take timely action to ensure adequate water supply to the Medupi power plant for the operations of the borrower’s (Eskom’s) six units, including the flue-gas desulphurisation units”.
Under new air pollution laws, all polluting industries will have to comply with stricter emission requirements.
The first new regulations come into effect in 2015 and stricter laws in 2020.
But Eskom has said it will not be able to comply with these deadlines and has asked the government to be allowed to postpone doing so.
“Flue-gas desulphurisation is water-intensive – it will triple the water use of Medupi – and it cannot be installed on all six units until additional water is available,” Eskom said.
It said water in the Mokolo Dam was enough to meet the operational, but not the clean technology, needs at Medupi.
Medupi will need 15.4 billion litres of water a year: 6bn for power production and 9.4bn for flue-gas desulphurisation.
However, environmental organisations believe Eskom has reneged on the World Bank loan agreement.
The Centre for Environmental Rights, acting for Earthlife Africa and groundWork, has called on the World Bank to take action.
Robyn Hugo, an attorney at the Centre for Environmental Rights, wrote to the World Bank to say “Eskom appears to have reneged on its undertaking to the bank”.
Hugo called on the World Bank to “take such action as is within their power to ensure that Eskom complies” with emission standards when they came into effect.
Sustainable Energy and Climate Change Project co-ordinator Tristen Taylor wrote to the World Bank saying that if it accepted Eskom’s request for postponing installing clean technology at Medupi, it would in effect be consenting to bankrolling a “much dirtier” power station.
Taylor said the World Bank’s reputation was at stake.
Asked to comment, the World Bank said the loan for Medupi had been approved under the applicable South African legislation.
Eskom was following standard procedures in asking for a postponement of complying with new emissions standards.
The National Treasury did not reply to requests for comment. The Department of Public Enterprises said Medupi would get extra water from the Mokolo-Crocodile River augmentation scheme. Eskom would then “retrofit” Medupi with flue-gas desulfurisation equipment.