South Africa Gets $497 Million to Produce Clean Energy From Coal Plant Site

The project will serve as a working model for the transition away from fossil fuels.

Paul Burkhardt

04 Nov 2022, 07:31 PM IST

A coal delivery truck departs from the Komati coal-fired power station, operated by Eskom Holdings SOC Ltd., in Mpumalanga, South Africa, on Tuesday, Jan. 12, 2021. In South Africa, for decades almost all the electricity needed to power Africa’s most industrialized economy has been produced by a fleet of aging coal-fired plants constructed alongside the mines to the east of Johannesburg.

(Bloomberg) -- A coal-fired plant in South Africa that shut its last unit this week secured $497 million from the World Bank and other funders to generate renewable energy from the site, a project that will serve as a working model for the transition away from fossil fuels.

The move toward cleaner energy is particularly complex in South Africa, which has chronic electricity shortages, is the world’s 13th-biggest source of greenhouse-gas emissions and has one of the highest unemployment rates. State-owned utility Eskom Holdings SOC Ltd. generates more than 80% of the nation’s power from coal, produced from mines that employ about 90,000 workers.

“The decommissioning and repurposing of the Komati coal-fired plant is a demonstration project that can serve as a reference on how to transition fossil-fuel assets for future projects in South Africa and around the world,” the bank said in a statement on Friday.

Read: Why Blackouts Are Still Crippling South Africa: QuickTake

The financing comprises a $440 million World Bank loan, $48 million in concessional financing from the Canadian Clean Energy and Forest Climate Facility and a $10 million grant from the Energy Sector Management Assistance Program. Some funds have been earmarked to create economic opportunities for local communities, with about 15,000 people expected to benefit, according to the bank.

Eskom said that 150 megawatts of solar capacity, an equivalent quantum of battery storage and 70 megawatts of wind energy will be generated from the Komati site, while the existing transmission infrastructure will be utilized. The utility estimates 53 gigawatts of renewable energy will be needed by 2032 in order to replace retiring plants that burn coal.

“Reducing greenhouse-gas emissions is a difficult challenge worldwide, and particularly in South Africa given the high carbon intensity of the energy sector,” World Bank Group President David Malpass said in the statement.

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