At the end of last week the board of the World Bank approved a $3.75 billion loan, most of which will go to build one of the world's largest coal-fired generating plants. The project had come under mounting fire from environmental leaders around the world and from the Obama administration, which wants to discourage international lenders from financing new coal plants. In the last 15 years, public lenders like the World Bank have funded $37 billion in 88 coal-fired plants in developing countries, according to a report cited in a New York Times article. And as noted in a recent blog post here, South Africa's government has come under increasing criticism at home too, because its heavy investment in energy will burden future generations with a high level of indebtedness and present-day ratepayers with much higher electricity costs.
Eskom, the leading national energy company, is embarked on a $50 billion program to boost capacity, which could result in electricity prices rising 25 percent per year for three straight years.
The World Bank, defending its position, points out that large solar and wind projects also will financed out of the loan, and that South Africa has pledged to cut its greenhouse gas emissions 34 percent by 2020--twice the U.S. pledge, for what that's worth. The U.S. government, for its part, wants the World Bank to only fund projects in the future that are at least carbon-neutral.