South Africa: World Bank Development Loan to Bring Change to Coal-Dependent South Africa?

in a press release that a U.S.$1 billion Development Policy Loan has been offered to support the government's efforts to promote long-term energy security and a low carbon transition. The World Bank intends for the loan to tackle two aspect's of the nation's energy crisis:power utility which recently saw board chairperson Mpho Makwana step down from the position. This is intended to redirect resources towards investments and maintenance of existing power plants.

Secondly, it will support a low carbon transition, most notably through private investment in sustainable energy including by households and small businesses, and strengthening carbon pricing instruments.for a Just Energy Transition Partnership are underway with Presidential Climate Commission Commissioner Joanne Yawitch saying in December 2022 that initial funding of about U.S.$86 billion to transition to a low carbon and climate resilient society for the five-year period 2023-2027.

Whether meaningful change can come from the World Bank funding will have to be framed against other additional difficulties, one of the most important being the nation's reluctance to transition away from coal use. 85% of South Africa's electricity is produced in coal power plants,. This is much higher than all countries except Mongolia and Kosovo, both of which have a higher dependency with much smaller populations of three million and two million respectively.

South Africa's population currently stands at 62 million. Under the nation's current Integrated Resource Plan , which charts the nation's energy mix plan for the next few decades, 11.3GW of coal power at seven old plants are scheduled to be decommissioned by 2030. However, the legislation is currently under review with a draft IRP expected to be published for comment before the end of 2023.

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