OPINION: The Medupi power station, if completed, will be the largest coal-fired power plant on Earth, emitting more carbon dioxide than the 143 least-emitting countries.
It was never in the public interest to incur a debt of $3.75-billion to build coal-burning Medupi
Instead of accepting the World Bank’s vote of confidence in the struggling power utility, the public should use this moment of Eskom’s crisis to express a lack of confidence in the World Bank, an expression that must be accompanied by the repudiation of the debt incurred in 2010. The odious nature of the debt is clear, and it is only a lack of political will that prevents the state from standing up to the bank.
The doctrine of odious debt, long recognised in international law, rests on two pillars: debt that is (a) incurred against the best interests of the population of the borrower state, and (b) that this condition was known — or ought to have been known — by both borrower and lender.
The World Bank repeatedly claimed that the 2010 loan was meant to increase South Africa’s electricity generation capacity through a progressive “energy mix”. To this end, the bank promoted Medupi as a power station that would employ efficient, ultra-supercritical “clean coal” technology. Clean coal has largely been shown to be a myth. Medupi may be one of the most efficient coal power plants ever built, but it still emits more carbon dioxide than most countries.
The scientific consensus on anthropogenic climate change shows that allowing global average temperatures to rise significantly will have drastically adverse effects on human, animal and plant life. One of the first major international meetings on climate change was in 1979, when the World Meteorological Organisation convened a conference of scientists to discuss the adverse effects of climate change on human societies, and its anthropogenic origins. There have since been regular climate change conferences, such as the United Nations Framework Convention on Climate Change meetings that have been held annually since 1995.
The 2010 World Bank loan was also mired in severe corruption. Hitachi Power Africa, the sub-Saharan African subsidiary of transnational corporation Hitachi, was contracted to build the boilers at Medupi. Chancellor House Holdings, an ANC investment arm, owned 25% of Hitachi Power Africa. The ANC is said to have been enriched by up to R1-billion through Chancellor House’s dealings with Hitachi, earning a roughly 5 000% return on investment.
In 2015 the United States Securities and Exchange Commission (SEC) ordered Hitachi to pay a fine of $19-million because of Hitachi’s breach of the US Foreign Corrupt Practices Act. The SEC investigation found that Hitachi gave Chancellor House millions of US dollars in “success fees” in instances in which Hitachi was granted contracts “substantially as a result” of Chancellor House’s direct connection to ANC decision-makers. This ensured that it was profitable for the ANC to contract Hitachi.
Even the current head of the World Bank, David Malpass, has been critical of the corrupt dealings of the bank. As Bear Stearns investment bank’s chief economist, Malpass urged the public not to panic about the credit market, just months before Bear Stearns collapsed from exposure to subprime mortgages, indicative of the calibre of economic leadership the World Bank encourages.
Repudiation of Eskom’s debt to the World Bank is a simple yet effective demand. The clearly illegitimate nature of the debt burden could be used to rally popular mobilisation, allowing the public to hold the South African government and the World Bank responsible for the adverse effects of the 2010 loan to Eskom.Read more: Mail & Guardian
World Bank flags Eskom project Eskom will urgently have to find about R10 billion for a new mega construction project to avoid severe penalties on it’s World Bank loan for its two mega-construction flops – Medupi and Kusile.
Debt-relief law will further weaken economy, warns Banking AssociationHowever, others say estimates of what the bill may cost the economy are over-exaggerated, and it will have almost no impact on lenders
Credit bill means people might escape repaying their debt, banking group warnsBanks will either have to price in higher risks or avoid lending to low-income customers altogether, the Banking Association SA says
Debt-relief bill hits financial services stocks and retailersShares in financial services groups and retailers fell on Friday morning after the president signed the National Credit Amendment Bill into law 🔒
Brian Molefe to pay Solidarity R700,000 and Eskom R10mThe former Eskom CEO has now exhausted every avenue to appeal against the court ruling and will have to pay back the money