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Eskom is trying to change the terms of a $ 3.75 billion World Bank loan to avoid spending money to cut emissions from one of its largest power plants.
The 2010 loan is being used to partially finance the construction of the 4,764-megawatt Medupi coal-fired power station east of Johannesburg. It contains a “legal pact” that Eskom must install so-called flue gas desulfurization equipment, or FGD, at the plant by 2025 to curb sulfur dioxide emissions, according to the World Bank.
“These are internal considerations that are being discussed with our stakeholders and partners, of which the main ones are the World Bank and the government,” Eskom said in response to the consultations. “Eskom has held informal talks with the World Bank, but no commitment or decision was made.”
Eskom, which is government-owned and produces almost all of South Africa’s power, is struggling to pay a debt of R454 billion and says the team would cost R42 billion. Still, the pollution the company emits is the subject of a lawsuit filed against the government and represents between 300 and just over 2,000 deaths a year, according to studies by Eskom and independent experts.
“Any change to FGD in Medupi would require the consent of the World Bank,” the lender said in a response to questions. “We understand that Eskom may be investigating alternative solutions, however, the World Bank has not received a proposal.”
Sulfur dioxide contamination causes respiratory illness and acid rain.
Eskom argues that in addition to being expensive, the equipment would increase water consumption, require the use of large amounts of limestone, and produce additional carbon dioxide, a greenhouse gas. Some of the money saved could be used to adapt some older coal plants to use another fuel, he said.
“Installing FGD in Medupi can reduce the health impact by a small margin, but will result in other negative environmental impacts,” said Eskom. Replacing older coal plants would reduce “sulfur dioxide, nitrous oxide, particulate, and carbon dioxide emissions.”
The company would also need permission from the government to change its plans.
Eskom has had an “initial informal commitment to the Department of Environment, Forestry and Fisheries” and will formally address it if it decides to make a proposal, the utility company said. The department did not immediately respond to a request for comment.
