WASHINGTON -- A World Bank-backed coal plant in South Africa is seeking to delay the implementation of pollution controls, a request that is raising new concerns about the bank's ability to enforce environmental standards on projects it supports.
In April 2010, the World Bank approved a $3.75 billion loan to the South African public utility Eskom to build the Medupi coal-fired power plant, which would be one of the largest power plants in the world. The loan was highly controversial, with the United States declining to vote on it due to concerns about its contribution to global warming. One of the conditions for the loan's approval was that the plant would have to install a type of pollution control known as flue gas desulfurization equipment to abate the release of harmful emissions like sulfur dioxide, a dangerous pollutant.
The plant was supposed to be fully commissioned by 2015, but due to delays, that date has been pushed back to 2017. Eskom was required under South African law to have pollution control equipment installed by 2020. But now Eskom is asking for an extension in order to meet those pollution control requirements, requesting a compliance date of 2027, a full 10 years after the plant is expected to be up and running.
Eskom requested the extension in an application to the South African Ministry of Environment and Forest. The application also states that the plant is unable to install pollution controls due to constraints on its access to water, which raises questions about whether Eskom should have identified that problem before it promised to install the controls in the first place.
At another point in the document, Eskom suggests that perhaps pollution controls aren't necessary at all. The company offers as its reasoning that such controls could increase the cost of electricity, making it in turn less affordable, thus forcing more people to use off-grid energy (such as burning coal or wood at home) which might cause "a deterioration in air quality in low income areas." This in spite of the fact that the controls are designed to mitigate sulfur emissions, which are directly linked to emphysema, bronchitis, other lung conditions and premature deaths.
South African groups that pushed for pollution controls are concerned that the delay will become permanent. "They should install the [flue gas desulfurization equipment] upfront with the building of Medupi, but they know that this will never happen; thus the current delay will likely be a permanent rolling delay, as Eskom will wish to avoid the expense and effort of securing water supplies," said Bobby Peek, the director of South African environmental group Groundwork, in a statement to a local engineering magazine.
World Bank management is expected to review the Eskom project in a meeting on Tuesday. A confidential World Bank brief on the status of the plant, obtained by The Huffington Post, notes that Eskom has asked for an extension on implementing the pollution controls, but it does not mention 2027 as the deadline desired by the company.
In a statement issued in September, Eskom defended its application for the delay: "Eskom remains committed to deliver power to South Africans in an environmentally responsible manner and with due consideration of the impacts it will have on the well-being of the population in the proximity of its plants. Eskom's plans to retrofit Medupi Power Station with flue gas desulphurisation (FGD) ... six years after each unit has been commissioned remain unchanged and do not differ from the original environmental approval."
World Bank spokesman Sarwat Hussain confirmed in a statement to The Huffington Post that bank management intends to review the progress on the Medupi plant this week. "As is standard procedure, bank management and staff cannot comment on an issue slated for board review," said Hussain. "Eskom has assured us that its plans to install flue gas desulfurization (FGD) equipment at the Medupi power plant by 2023 remain unchanged."
"The World Bank is committed to working collaboratively with the South African Government and Eskom so that Medupi complies with applicable South African environmental regulations and produces badly needed electricity for economic growth, more jobs and improved well-being," he said.
The bank's critics, however, say this is just another example of why coal projects are a bad bet. "The bank approved the project despite knowing its negative effects. If approved, it will mean even more pollution and more negative impacts for the communities living in the region and beyond," said Nezir Sinani, the climate change coordinator for the Bank Information Center, a watchdog organization. "Today's Eskom request is ridiculous." He argued that if the South African government approves the exception, it would be a significant blow to the bank's social and environmental safeguards.
The U.S. Treasury also cited worries about Eskom's request in a statement to The Huffington Post. "We have serious concerns about the potential environmental impacts of delays in the construction of the Medupi Power Station," said a Treasury spokesman. "We urge Eskom and the South African authorities to take all necessary steps to comply with their obligations under the loan from the World Bank and avoid further delays. We also urge the bank to continue to monitor implementation of this project and work with the South African authorities to ensure compliance with the bank's safeguard policies."
Last month, the Treasury Department announced its own new guidelines that would prohibit U.S. financing for coal plants abroad unless they have the technology to capture greenhouse gas emissions. But environmental groups have been critical of the policy, citing concern that the exceptions might be too broad.
The latest news about Eskom's Medupi request has reignited those concerns.
"There's no way you can possibly trust [the World Bank] when it comes to what it's been saying about being climate friendly, moving beyond coal, implementing regulations," said Justin Guay, the associate director of the Sierra Club's international climate program. "It's kind of laughable that they would not force Eskom to adhere to what they said they were going to do when they first supported the project."