Posted by: Dr Churchill | July 1, 2010

World Bank and US Ex-Im Bank finance giant coal projects around the world. Why?

Why are all the Global Institutions with the fancy Vision and Mission statements and the powerful leaders focused on ruining our Atmosphere?

The Environmental Parliament released a Report conclusively looking at corruption syndicates of Climate Changers and World Bank is a prominent member there.

The South African Union of Churches calls the World Bank thus:  ”World Bank is the world’s leading financier of climate destruction. Yes, the World Bank.” 

You need to Look no further than the World Bank and the Import Export Bank, two venerable world leaders in international finance that are going the way of Fannie May and Freddie Mac. With morals bust, the rot seeping in, and the short termism evident in all their actions, the crash is imminent for these two rudderless banks. Same as it was for their two FM counterparts and was demonstrated amply to anyone having the vision to see.

Mark my words: These two behemoths, too big to fail; will taste the dirt, inside the next leg of this recession, double dip recession or even the big ”W” second phase or the small ”w” or whatever it is, save but a simple Depression. And they will be bringing it on to themselves and crashing the other banks, they syndicated with, because they are all led by dickheads too.

Just as Proof of stupidity: Look at the South African investment of the World Bank. During the best years of Mandela after apartheid they statedd away and denied any role and involvement citing unreliability of the SA economy…. 

Whatever…

Now after Mandela has gone from power and he has aged, and is not able to rein in the dirty boys; the Corruption has become endemic and systematic.  Naturally the smart bankers of World Bank, meeting their counterparts of South Africa, they choose to invest in SA in a spectacularly big and Polluting way.

And not only they jump with both feet into the dirtiest project on Earth that Medupi Coal factory represents; they also find ways to propagate this decision to other banks and financial institutions worldwide by coordinating and syndicating the loan on behalf of their corrupt South African counterpart Executives of  ESCOM.  Thus they mask the size of their crime by hiding in the crowd of bankers willing to Be so Unethical as to trade profits for the very Air we breathe…

Out of a total of $3.75 billion, the first World Bank loan to South Africa since the end of apartheid, $3.05 billion will go towards building Eskom’s planned supercritical coal plant. An additional $250 million will be used to pilot a project for the future creation of a 100MW wind farm and a 100MW concentrated solar project, and $485 million for energy efficiency projects, including a railway to transport coal. Salad dressing to cover the body of the Giant crime they are committing against our Climate, our Atmosphere and the Environment. A crime against humanity no less…

When it came to the vote at the end of last month, some countries with voting rights abstained, including the US, the UK, the Netherlands, Norway and Italy.

Even the traditionally conservative US Treasury issued a statement explaining its decision not to vote, citing “concerns about the climate impact of the project and its incompatibility with the World Bank’s commitment to be a leader in climate change mitigation and adaptation”.  But they didn’t go far enough by vetoing the deal although they had every right to do so….

Friends of the Earth’s head of international climate, Asad Rehma, said: “The loan, which fails to meet every single World Bank environmental and development policy, will lock South Africa into 40 years of reliance on dirty coal.

The fact that even these brave and courageous five country representatives, refused to back this dirty deal is a result of a massive global campaign led by South African faith groups, trade unions, anti-poverty and environmental groups.

The UK and the US government’s environmental credibility now hangs in the balance after it passed up the opportunity to show real leadership by blocking the deal.

Obiageli Ezekwesili, World Bank vice-president for the Africa region, said: “Access to energy is essential for fighting poverty and catalysing growth, both in South Africa and the wider sub-region.  Our support to Eskom combines much-needed investments to boost generation capacity for growing small and large businesses, creating jobs, and helping lay the foundations for a clean energy future through investments in solar and wind power.

Preliminary construction work began in 2007 on Eskom’s Medupi Power Station, which is expected to have a capacity of 4,300MW and cost 175 billion South African rand ($24 billion). The first phase is due to be commissioned in 2012. But without the World Bank Loan the Medupi coal and massive Greenhouse gases and CO2 spewing plant won’t be built, because the remaining finance hedges on the low rates and the strength of the WB  to become attached to this highly polluting project. The built out and operation of this project also makes it impossible for South Africa to make or even meet it’s commitment towards any kind of global Carbon deal such as the Copenhagen Accord.

So the World Bank is undermining Obama’s Climate policy and the World’s Climate survival full on with their actions. Are these bankers working for Al Qaeda? 

One has to wonder…

Even last month, the South African local residents filed a complaint with the World Bank in a bid to block the project, while local and international environment groups urged the bank to reject the loan.

South African and international civil society organisations signed a statement calling for governments with voting power in the World Bank to veto the loan, slamming Medupi as a “bad project, contributing to energy poverty and environmental destruction”. The organisations also argue that World Bank financing is inappropriate for South Africa, based partly on the bank’s history of financing apartheid-era loans.

Erich Pica, president of Friends of the Earth US, said: “This coal loan is not about alleviating poverty or supporting sustainable development and the World Bank has no business making it. The World Bank should listen to the voices of communities in South Africa and cut the coal.

“Multinational corporations will be the big winners if this loan moves forward. Big corporate polluters cut secret deals with Eskom under apartheid. They receive cut-rate electricity and won’t have to pay their fair share of the cost of building the coal plant. Poor households will be stuck with much of the bill. This is unjust and unacceptable.”

“This project is to secure uninterrupted electricity for large corporations, such as smelters and mining houses under secretive special pricing agreements. It is not for the millions of poor people who cannot afford or do not have access to electricity. South Africa does not need this loan,” said Bobby Peek, director of groundWork, part of Friends of the Earth in South Africa.

However, Eskom argues that the power station will be a “significant improvement in overall thermal efficiency compared to the existing power stations in South Africa, resulting in better utilisation of natural resources, such as coal and water, and a reduction in emissions of carbon dioxide per unit of electricity produced”. The utility, which has a total generating capacity of just under 42,000MW, out of South Africa’s total of 43,500MW, estimates the project will add 0.43% to the country’s GDP. Medupi would be the first supercritical coal power station in Africa.

In response to criticisms of the project, the South African government said that industrial customers benefit from lower electricity prices because it is cheaper and less technically challenging to supply them. “There is a common misconception that industrial customers are subsidised by residential customers, justified by comparing the average prices paid between the two customer categories. However, one cannot directly compare the two values as the cost to supply all customers is not the same,” it said in a statement. It notes that residential customers make up 5% of Eskom’s sales.

Business association Business Unity South Africa backs the loan, arguing that “accessing a World Bank loan is appropriate for a developing country like South Africa which is both under-borrowed internationally and anxious to build necessary infrastructural capacity.

“Failure to borrow sensibly for Eskom’s needs will either mean yet higher electricity tariffs or the risk of load shedding if Medupi is not completed in time.”

Rand Merchant Bank analyst Jana Kershaw said in a research note today that “a negative vote could have a severe impact on the timeframe, or, worse, viability of the Medupi build, but despite the energy minister indicating that there is no plan B in place if the World Bank loan application fails, one shouldn’t underestimate demand for emerging market debt in the global capital markets.

The fact of the matter is this World Bank stupidity rivals BP Executive’s stupidity and is also catching up with others. Seems like the virus is spreading to Export Import Bank of the USA which follows the Spill of BP oil into the Gulf of Mexico with an effort to spill more CO2 into the Atmosphere this time in another humongous coal factory in India…

 At a regular meeting of its board last week, Ex-Im refused to provide guarantees worth up to $600 million to support the export of coal-mining equipment made by US firm Bucyrus, to be used in the $450 billion Sasan Power Project, developed by Reliance Power in India. The project includes a coal mine and a coal-fired power plant with a capacity of nearly 4,000MW and annual emissions of 26.4 million tonnes of carbon dioxide equivalent. 

But that’s not the whole story… Seems like the bankers really want to find a way to finance this Coal factory and finance the resultant pollution. Maybe they are also secret agents of Al Qaeda trying to drown the world in CO2 and green house gases to asphyxiate all living breathing life forms. 

Shouldn’t they be living in Waziristan instead of Washington DC and New York?

And doesn’t the Department of Defense have enough drones to take them out now that we know their names and coordinates?

Where is Homeland Security when You need them?

 Fred Hochberg, president and chairman of the export-credit agency, has written to Reliance chairman Anil Ambani proposing that the firm re-submit the project, to “take into account Reliance’s expressed commitment to invest in the renewable energy sector”.

“It’s an astounding development,” said Doug Norlen of the NGO Pacific Environment. “It’s apparent that the Ex-Im board of directors caved in and will allow a project to go forward that is damaging to the climate. The project developers’ pledge to possibly consider a renewable project in the future doesn’t detract from the damage this project will do.”

While Reliance was not immediately available for comment, the letter seen by the Environmental Parliament, states that Ex-Im Bank “is willing to enter into an MOU facility; A memorandum of understanding, to encourage Reliance’s purchase of US renewable energy technology. This MOU would relate to the construction of renewable energy power plants, producing at least 250MW of power, which are expected to produce no carbon emissions.”

Hochberg said that the agency “is prepared to consider this proposal in light of the new information and Reliance’s ongoing commitment to renewable energy. I look forward to working with you on these projects with the intent to finance the sale of Bucyrus-made mining equipment and support US jobs.”

Hochberg said in a statement: “The Export-Import Bank works to strike a balance between its twin Congressional mandates of supporting US jobs through exports and contemplating the environmental impact of the projects it supports. These goals are not mutually exclusive, and Reliance’s commitment to work with the bank is an important step in the right direction for both the environment and US workers.”

Ex-Im’s three-person Board last week voted two to one against providing support to the project, the first time the agency had rejected a project on grounds relating to climate change.

Reliance Power said work is still going ahead on the 3,960MW project near Sasan village in the Madhya Pradesh province of India. The project is already under construction and completion is expected in December 2013.

This follows on from a statement by the US Treasury in April, saying it abstained from a World Bank vote on supporting another controversial coal project in South Africa, because of concerns about the climate impact of the Eskom project.

Attention has also stepped up relating to the greenhouse gas emissions associated with projects backed by Ex-Im and the Overseas Private Investment Corporation, the two government agencies offering financial backing to US exporters.

NGOs reacted with scepticism to Ex-Im’s detailed carbon policy, released in March, and a similar South African people’s and NGO and civil society petition, attached bellow, suggesting that the plan could pave the way for the export credit agency to begin financing coal factories all over again and objecting to the South African Medupi giant Coal Factory finance from the evil boys of WB.

The Environmental Parliament is assembling a team of lawyers in Washington DC to object to this Financing that was done on false documentation by Escom.

Do you care to help?

Now is your chance to put your legal skills forward for something Meaningful…

Yours,

Pano

 PS:

The Environmental Parliament’s objections to WB and our grave concerns about the Medupi back room deal making, have proved to be correct, and as the World Bank chose to take the low road, so does Ex-Imp Bank.  

Financing and selling obsolete technology to the developing world has long been an imperial ploy to keep them indebted in a growing state of debt and servitude…

But these developments take the cake because it is like the WB and Ex-Im Bank are financing Al Qaeda against the rest of us and especially against the Climate Security of the world.

What are they thinking?

PS2:

Then again as my friends at the pub like to say:

Banker Wankers are screwing the Environment once more.

You can’t build an Environment on dicks.

That’s why most Banks like that fail miserably the Ethical stress test.

And they fail all of us too, because we are the shareholders of these out of control Banks via our governments…

Yet they are built up on dickheads.

Simple recipe for imminent failure.

PS3:

And here is the response of the African people and the African Continent’s and South African Civil Society’s perspective on the issue:

 STATEMENT FROM SOUTH AFRICA AND OTHER AFRICAN NATIONS CIVIL SOCIETY ORGANIZATIONS ABOUT THE WORLD BANK AND COAL FACTORY FINANCE 

OF ESKOM’S PROPOSED $3.75 BILLION WORLD BANK LOAN OUT F A TOTAL $27 BILLION FOR THE MOST POLLUTING MODERN COAL PLANT IN THE WORLD.

Should the World Bank grant a $3.75 billion (R29 bn) loan to Eskom?  

 NO, NO, NO and NO.

A resounding NO coming from the mouth of the South African People.

 We South African and African organisations which for years have advocated social and environmental justice here and abroad, oppose Eskom’s proposed Bank loan – and indeed its new construction programme more generally – for several reasons. 

1) It is a bad project, contributing to energy poverty and environmental destruction.

 This particular project is fatally flawed, on grounds that Eskom’s strategy is: 

based primarily on large coal-fired stations (followed by nuclear) and as many as 40 new coal mines, which will add to South Africa’s already extremely high carbon intensity, as well as the air pollution and degradation of scarce water resources; 

designed to continue supplying the world’s cheapest electricity mainly to large energy-intensive industries, including steel and aluminium, whose corporations are headquartered abroad (hence contributing to the profits outflow on South Africa’s balance of payments); 

to be mainly paid for by unaffordable tariff increases imposed on ordinary South Africans, while the beneficiaries – the largest industrial consumers – are exempt from price rises because of multi-decade special purchase agreements offered to them during apartheid and in the 1990’s; and as a result, 

unable to alleviate ‘energy poverty’, but instead entrenches suffering by imposing ‘cost recovery’ on people who cannot afford it, with Eskom already admitting a ‘typical township household’ will face a 2009-2012 monthly price rise from R360 ($48) to R1000 ($130). 

2) Inappropriate financing. We therefore oppose all funding, foreign and local, for Eskom’s coal/nuclear expansion plans. Were Eskom to engage in a reasonable energy policy based on demand management, with supply shifting to renewable, and the expansion of Free Basic Electricity beyond the current tokenism as well as connections to urban shackdwellers and the rural poor, that would be worthy of support. As for green energy investments that are not import-intensive, local financing would be more appropriate than a World Bank loan – and is readily available, including through state debt and halting subidised electricity contracts to multinationals. The financial danger of a World Bank loan is that the SA currency will crash (as it has five times since 1996), hence making repayment much more expensive (since the loans are not repaid in rand but in dollars), hence adding to the extreme cost burden poor South Africans will face. 

3) Eskom’s special responsibility to Africa. We must not forget that South Africa consumes more than its fair share of Africa’s environmental space for development (more than 40% of CO2 emissions from just 6% of Africans), mainly because of Eskom, Sasol and other large corporations which emit the vast bulk of greenhouse gases. The World Bank loan will sink Eskom – and South Africa – into not only financial debt to the West, but much deeper ‘Climate Debt’ to Africa. African civil society unites with SA critics of Eskom’s irresponsible climate-denialist projects. 

4) The World Bank’s special responsibility. Specifically, we oppose World Bank funding for Eskom and call on all governments with Bank voting power to oppose the proposed loan on March 24, when the Board meets. The World Bank has still not offered reparations for its 1951-67 apartheid-empowering loans to Eskom, for which only white people received electricity (but the entire society repaid the loans). Further, the Bank has consistently promoted privatisation and/or commercialisation of state utilities and cost-recovery (resulting in disconnections), which together prevent access to electricity by poor South Africans. We call on the Bank’s member governments and directors to endorse the recommendations of the 2004 World Bank Extractive Industries Review. The Review found that, aside from climate damage, the Bank’s fossil 

fuel projects had neither the intention nor the effect of alleviating poverty and called for them to be phased out. 

5. The US government’s special responsibility. We especially call on the US Treasury – which has opposed Bank coal financing in line with a recent ‘Guidance Note’ – to veto the proposed loan, and to also halt US government subsidies to the coal industry so as to avoid the legitimate charge against Washington of hypocrisy. We are delighted about three processes internal to the US, which are a model for our own work in South Africa: Sierra Club legal action has prevented new coal-fired plants from being built; courageous activists in West Virginia are engaged in direct action to halt ‘mountaintop coal removals’; and the US Environmental Protection Agency adopted December 2009 provisions to implement its ‘endangerment finding’ that carbon from coal is a pollutant and must be directly regulated. What must be avoided is the US imposing responsibility for carbon cuts on the South, but without providing funding or technology support for renewable energies as part of the ‘Climate Debt’ that the US owes for taking up so much environmental space. World Bank Executive Directors representing the South have responded to the US Guidance Note making several of these points, and they oppose the use of the Bank as an instrument of US power. This is a fair point, and a long-standing grievance we all share, given Washington’s extremely destructive role at the Bank and in the world economy. Nevertheless, the dissident Executive Directors’ response supports further Bank funding for fossil energy and specifically coal-fired power stations, justifying coal as necessary for poverty alleviation and economic growth in developing countries. In reality, economic growth has been accompanied by growing inequality in South Africa and many other countries that suffer ‘resource curse’. The poor are mostly left worse off than before. Even where their income improves by conventional measures, the gains are lost to services cost recovery (and disconnections), to health costs imposed by pollution, to the loss of non renewable resources, to water/land theft associated with coal-fired power, and to the increased cost of access to amenities previously provided as public goods. In addition, it is common cause that the poor are most vulnerable to climate change. In many countries, they are already feeling the costs in intensified droughts and floods and in the loss of land through coastal erosion. 

6) Towards the transformation of energy, production and financing. We see renewable energy, not coal-fired power stations, as the optimal development path for Southern economies, creating more jobs, building local manufacturing capacity, and avoiding the environmental mistakes of Northern countries. As in South Africa, most World Bank coal power projects are designed to supply industry, not people. They do not necessarily increase per capita access to energy. The industries in turn are mostly geared for export in line with the World Bank’s promotion of export oriented production. The goods are then consumed primarily in developed countries. Further, many industries are established with foreign direct investments. In the process, much of the heavy industry in developed countries has relocated to developing countries in search of cheaper energy and cheaper labour. Yet because their headquarters are in London, Melbourne, New York, Toronto, Zurich and other offshore sites, a substantial portion of profits is returned to rich countries, exacerbating the poor countries’ balance of payments deficit. Because South Africa’s payments deficit is so extreme, due to the outflow of profits and dividends to foreign corporations which benefit from the world’s cheapest electricity, The Economist magazine judged the country as the world’s riskiest emerging market (24 February 2009). 

7) The demand side management alternative. Instead of expanding its coal/nuclear facilities, Eskom should engage in serious demand side management, beginning by phasing out electricity to smelters that have little linkage with the South African economy and that are capital – rather than jobs – intensive. Concrete plans should be made for a ‘just transition’, so as to provide alternative, well-paid ‘green jobs’ – e.g. in subsidised thermal-solar geysers for every house – to those workers who are employed at the smelters. At the same time, the special purchase agreements should be disclosed to the public and opened for renegotiation. The freed up energy should be redistributed to provide for a much larger ‘lifeline’ supply of universal Free Basic Electricity – with a rising block tariff to encourage conservation to improve spinning margins which will buy time for a switch into renewable energy technologies. By not expanding its coal/nuclear facilities and instead redistributing the electricity capacity it has, and by simultaneously 

switching to renewable sources, Eskom can survive this crisis. But it can only do so if it is not in the clutches of the world’s leading financier of climate destruction, the World Bank. 

ENDORSEMENTS: 

South Africa 

350.org South Africa 

Alternative Information Development Centre 

Anti Privatization Forum 

Austerville Clinic Committee 

Benchmarks Foundation 

Bluff Ridge Conservancy 

Boitshoko Home Based Care 

Buhlebuyeza 

Ceasefire Campaign 

Centre for Civil Society Environmental Justice Project 

CJN!SA 

Citizens United for Renewable Energy and Sustainability 

Clairwood Ratepayers Association 

Diakonia 

Displaced Rates Payers Association 

DUCT Howick 

Durban Airport Farmers Association 

Earthlife Africa Ethekwini 

Earthlife Africa, Johannesburg 

Eastern Cape Environmental Network 

Ecumenical Service for Socio-Economic Transformation 

Ecumenical Women’s Prayer in Action 

Environmental Monitoring Group 

Environmental Parliament SA

Esigodini Environmental Group 

Federation for a Sustainable Environment 

General Industries Workers Union of SA 

Greater Edendale Environmental Network 

groundWork 

Inner City Resource Centre 

Isipingo Environmental Committee 

Isipingo Ratepayers AssociationJoint Action Committee of Isipingo 

Kathorus Concerned Residents 

KwaZulu-Natal Subsistence Forum 

Merebank Clinic Committee 

Merebank Residents Association 

Noordhoek Environmental Action Group 

Off the Ground 

Pelindaba Working Group 

Phulhumani CO OP 

Pietermaritzburg Association for Christian Social Awareness 

Renewable Energy Centre 

Silverglen Civic Association 

Siyathuthuka Group 

Socialist Group 

South African Chemical Workers Union (Gauteng) 

South African Council of Churches (Gauteng) 

South African Council of Churches 

Southern African Faith Communities’ Environment Institute 

South Durban Community Environmental Alliance 

Southern Cape Land Committee 

Soweto Concerned Residents 

Soweto Electricity Crisis Committee 

Springs Eco Friends 

Sustainable Energy and Climate Change Project 

Timberwatch 

Treasure Beach Environmental Forum 

Trust for Community Outreach and Education 

Tsogang Youth Group 

Umphilo waManzi 

Vaal Environmental Justice Alliance 

Vezani Disable Support Group 

Well Worn Theatre 

Wentworth Development Forum 

Wildlife and Environmental Society of South Africa (Gauteng) 

Workers World Media Production 

WWF SA 

Youth Agriculture Ambassadors 

Africa outside South Africa   

Ghana 

Friends of the Earth Ghana 
   

Kenya 

Kenya Debt Relief and Development Network 
   

Kenya 

Pan African Climate Justice Alliance 
   

Malawi 

Citizens for Justice 
   

Mozambique 

Justiça Ambiental 
   

Namibia 

Earthlife Africa 
   

Nigeria 

Environmental Rights Action 
   

Sierra Leone 

Friends of the Earth, Sierra Leone 
   

Swaziland 

Yonge Nawe 
   

Tanzania 

Lawyers Environmental Action Team 
   

Togo 

Les Amis de la Terre 
   

Tunisia 

Association Tunisienne Pour la Nature et l’Environnement 
   

Zimbabwe 

Magamba Cultural Collective 
   

Pan Africa 

Jeunes Volontaires pour l’Environnement 
   

Pan Africa 

Africa Youth Initiative on Climate Change 

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Categories

%d bloggers like this: