Internal Review Dings World Bank's Funding of Massive Coal Plant

| Fri Dec. 9, 2011 12:52 PM EST

I have a new article up today about Kusile, a new coal-fired power plant in South Africa that was funded in part by a loan from the US Export-Import Bank. In it, I also mentioned Medupi, a similar plant that is under construction in northern South Africa that was funded by a $3.75 billion loan from the World Bank.

But a recent report from the World Bank's internal inspector that the bank did not adequately evaluate the environmental impacts of the plant before approving the loan to Eskom. The panel found that "the magnitude of emissions from Medupi far outweighs emissions avoided" through mitigation measures, the report concludes. In addition to greenhouse gas emissions, it also cites "significant shortcomings" in the bank's consideration of water consumption, particulate pollution, or the impact on local communities. Nor were the impact of additional mines that would likely need to be created to feed the plant adequately considered.

The report didn't find that funding the plant violated bank rules on greenhouse gas emissions, but that's because the bank doesn't have clear climate targets, as Energy & Environment reporter Lisa Friedman noted earlier this month.

The report was issued after South African environmental groups requested an investigation. The report was covered in the local press on Friday (link is in Afrikaans, you'll have to pop it into Google Translate).

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