World Bank loan to help SA decarbonise, says Godongwana

Monday, November 7, 2022

The R9 billion concessional loan the World Bank granted to Eskom last week for the repurposing of the Komati Power Station will go a long way to ensure that government moves towards decarbonisation, says Finance Minister, Enoch Godongwana.

Godongwana and Public Enterprises Minister, Pravin Gordhan, on behalf of the South African government, on Sunday met the President of the World Bank, David Malpass, at the power plant in Mpumalanga.

The visit came after the loan approval for the power plant, which is set to become the country’s flagship Just Energy Transition (JET) project.

Malpass was on a short visit to South Africa while en route to the COP27 Summit in Egypt.

Gordhan and Malpass were welcomed in Mpumalanga by Premier Refilwe Mtshweni-Tsipane and received at the Komati Power Station by the Eskom Board chairperson, Mpho Makwana and Eskom CEO, Andre de Ruyter.

Godongwana, who met with Malpass on Saturday evening, said government is in partnership with a range of social partners to ensure a just energy transition.

“The financing Eskom is receiving from the World Bank will go a long way in assisting us to meet the ambitious targets relating to decarbonisation and the just energy transition that we have set for ourselves.

“The repurposing of Komati is a critical first step in a long journey, one that we cannot walk alone if we are to strike the urgent balance between our environmental, economic and energy imperatives.

“We will continue to mobilise capital, internationally and domestically, to finance the transition, in the interest of the lives and livelihoods of our people,” said Godongwana after the meeting.

Komati is set to be converted into a site for renewable energy generation, as the country gradually transitions from fossil fuels to clean energy resources.

It seeks to make a major contribution to mitigating climate change and ensuring energy security while supporting a range of economic initiatives for local communities in the Komati area.

Announcing the loan facility, Malpass expressed his confidence in South Africa embarking on the JET.

“Reducing greenhouse gas emissions is a difficult challenge worldwide, particularly in South Africa, given the high carbon intensity of the energy sector. Decommissioning the Komati plant this week is a good first step toward low carbon development. We are cognizant of the social challenges of the transition, and we are partnering with government, civil society, and unions to create economic opportunities for affected workers and communities,” said Malpass.

Gordhan said Malpass’s visit was an expression of confidence in South Africa’s ability to implement a JET in a way that minimises any negative impacts on local communities, which have over the years developed around coal stations.

“This project will greatly assist Eskom, South Africa and the international community to develop a deeper understanding and appreciation of how the processes of decommissioning and repurposing of coal-powered stations can be done in a manner, which mitigates the socio-economic impacts for workers and communities; before we scale up the move of the power sector into a low carbon path. Crucially, it will provide training in new skills and for new jobs,” Gordhan said.

The last unit of the Komati Power Station was decommissioned and switched off on 31 October 2022, signalling the end of its operating life as a coal-fired power station.

The Komati plant will be converted into a renewable generation site powered with 150MW of solar, 70MW of wind and 150MW of storage batteries, adding generation capacity to the grid, thereby continuing to put the site and its associated transmission infrastructure to good use.

A containerised micro-grid assembly factory has already been established on site. This will help prolong the usefulness of the infrastructure and provide economic opportunities to the community.

Eskom has developed a comprehensive JET Strategy, which places equal importance on the ‘transition to lower carbon technologies,’ and the ability to do so in a manner that is ‘just’ and sustainable. The employees remaining at Komati at the time of the decommissioning will become part of the Repowering and Repurposing project.

The Komati Training Facility is already under development. It will facilitate the reskilling, retraining, and upskilling of Eskom employees and members of the community, as appropriate.

Eskom has signed a partnership agreement with the South African Renewable Energy Technology Centre (SARETEC) of the Cape Peninsula University of Technology, and the Global Energy Alliance for People and Planet (GEAPP) to develop the training facility. –