World Bank Grants South Africa's Eskom $250 Million for Renewable Projects

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Eskom (Johannesburg), South Africa's state-owned power utility, has been granted a $250 million loan from the World Bank to help fund the construction of a 100-megawatt (MW) solar power plant at Upington in the Northern Cape and a 100-MW windfarm at Sere, which is 300 kilometers north of Cape Town.

In June, Eskom secured a $365 million loan from the African Development Bank to support both projects. In September, Eskom secured a $138 million credit facility from the French development finance group Agence Francaise de Developpment (AFD) for the Sere project.

The latest loan is funded by the World Bank's Clean Technology Fund, which promotes scaled-up financing for the demonstration, deployment and transfer of low-carbon technologies, with significant potential for long-term greenhouse gas emissions savings.

"Africa is beginning to grow and the problem of energy security is dampening that growth," said Obiageli Ezekwesili, the World Bank vice-president for Africa. "By investing in these cutting-edge, transformational solar and wind power projects, we are saying that Africa can lead the way in securing a clean energy future."

The African Development Bank estimates that about 90% of electrical power produced in South Africa in 2010 was derived from fossil fuels, emitting approximately 224 million tons of carbon dioxide and making the country's economy one of the most carbon intensive in the world.

Emission savings are estimated at about 5 million tons of CO2 equivalent over a 20-year life span for the Sere wind power project, and 9 million tons for the Upington solar power project.

Brian Dames, Eskom chief executive officer, said that the utility's first large-scale introduction of two renewable energy projects demonstrated the commitment to reducing the carbon footprint and making the transition to a cleaner energy mix.

According to the country's Integrated Resource Plan 2010, 42% of all new electricity generation will be expected to come from renewable sources over the next 20 years.

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