05/09/2010 05:12 am ET Updated May 25, 2011

World Bank Gives South Africa Lumps of Coal

In case you didn't catch it, the World Bank's top official for Africa just thumbed her nose at the dozens of renewable energy companies lining up to build clean energy in Africa's dirtiest economy.

Obiageli Ezekwesili, the Bank's Vice President for Africa, defended a controversial $3.75-billion loan to build a massive coal plant in South Africa with this head-in-the-sand statement: "There is no viable alternative to safeguard South Africa's energy security at this particular time."

The quote came in an article titled (without irony) "Africa Ready for Energy Transformation." With that kind of transformation, the continent can look forward to many more decades of playing catch-up with the rest of the world.

Maybe Ms. Ezekwesili missed the news that South Africa could get 10-20% of its electricity from wind power in the short term (and up to 70% over time), by harvesting some of its 50,000 MW of potential (it currently has just one 5MW commercial wind farm in place). Or that the sunny nation also has huge potential for solar (one study shows 547 gigawatts in potential for grid-based concentrating solar plants, not to mention equally impressive potential for solar water heating and solar PV).

Writes a local columnist, "Research shows that in conjunction with energy efficiency measures, 75% our electricity could be generated by exploiting renewable energy sources by 2050, slashing our CO2 emissions by 54% below 1990 levels and making massive strides towards avoiding catastrophic climate change." But the national utility, Eskom, has been despairingly slow to move away from coal to embrace a green energy future.

Says South African professor Patrick Bond: "South Africa's five-fold increase in CO2 emissions since 1950 and 20% increase during the 1990s, can largely be blamed upon the attempt by state electricity company Eskom, the mining houses (led by Anglo American) and huge metals smelters (especially BHP Billiton) to brag of the world's cheapest electricity. Emitting 20 times the carbon tonnage per unit of economic output per person than even the United States, South African capital's reliance upon fossil fuels is scandalous."

Says extractive-industries activist Bobby Peek, of the South African group groundWork: "The South African government cannot continue to give away electricity below cost, to fire smelters which have little linkage to the South African economy. If the World Bank loan goes through, poor South Africans will have to bear the burden of Eskom's debt, and climate change will intensify."

It's not just activists who are up in arms: the Cape Town Chamber of Commerce is calling for a national investigation into Eskom's "sweetheart deals" for big industrial energy users at the expense of everyone else. Unions, too, have recently joined a coalition calling on the World Bank to drop the project.

The World Bank, whose job is to fund poverty alleviation, not cheap power for aluminum smelters, talks of Africa's energy sector "transforming" itself the way the telecoms industry did - a truly transformative sector-wide change that brought affordable mobile phone service across the continent. But the energy sector cannot transform itself if it looks only to megaprojects for salvation. The telecoms industry was a bottom-up transformation, one that bypassed big bureaucracies to create decentralized service one could buy in small packages, as needed. As long as Eskom and other African utilities are focusing more on mega-industries' needs, and giving them subsidized rates to keep them happy, there will be no transformation, nor a significant change in the ranks of the unconnected. Africa definitely needs an energy revolution, but it needs to focus on people power first.

Meanwhile, renewable energy developers are waiting in the wings for Eskom to show them the money in the form of power purchase agreements. Wind power developer Eddie O'Connor told Engineering News that South Africa was "pregnant with potential".

I guess the World Bank won't be the one to deliver that baby.