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Public Enterprises Minister Barbara Hogan
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UK may block Medupi funding call
David McKay | Tue, 06 Apr 2010 11:11
[miningmx.com] -- THE UK government, due to call a general election at any moment, is under pressure to block South African efforts to secure a $3.7bn loan from the World Bank to build the Medupi power station.
TimesOnline reported on Tuesday that green groups were pressurising British prime minister Gordon Brown's government to use its deciding vote at the World Bank on Thursday to halt the coal-fired power station notwithstanding its importance to South Africa.
"Greenpeace, Friends of the Earth and Christian Aid argue that the risk to the world's climate from the plant's emissions outweighs the benefits of the secure-electricity it would supply," TimesOnline reported.
Public Enterprises minister Barbara Hogan warned on March 12 of "dire consequences for the South African economy" if Eskom failed to secure the loan from the World Bank.
"If we do not have that power in our system, then we can say goodbye to our economy and to our country. This is how serious this thing is," Hogan said.
Energy Ministe Dipuo Peters on Tuesday also stressed the importance of the loan. "All South Africans must support the loan because 25% of people are still waiting to have access to basic minimum electricity," the minister said.
Medupi, which will produce 4800 megaWatts, is expected to cost $15bn (R125bn), almost double the amount for which it was first approved.
Brian Dames, a director at Eskom, the South African electricity utility wanting to build Medupi, said about R25bn of the extra costs were allocated for improved efficiencies, while contingency issues added another R10bn.
The boilers at Medupi will result in higher efficiency and better utilisation of natural resources, such as water and coal, and will have improved environmental performance.
"Medupi will be one of a few dry-cooled coal power stations [in the world], which will save water," said Dames. The cost of that technology came in at about R25bn.
The rest of the extra cost came as a result of movements in the commodities used for the construction, mainly steel. Dames said, however, Eskom had committed itself to saving R22bn a year from its existing operations.
The first of six generating units would be commissioned by 2012.
According to TimesOnline, Medupi is larger than Drax, Britain's largest coal plant, and would pump an estimated 25 million tonnes of carbon dioxide a year into the atmosphere.
"The Government had been inclined to support the loan but is now wavering and may vote against it in Washington on Thursday, partly because it does not want to offend green supporters before the election," TimesOnline said.
South Africa's Hogan said the World Bank loan was needed to finish of the final 25% of the Medupi power station, the biggest "build" of its kind in the southern hemisphere.