World Bank’s R9 billion boost to Komati Power Station
The power sector is a major contributor to greenhouse gas emissions in South Africa, accounting for 41% of CO2 emissions.
The World Bank has approved $497m, nearly R9b, to decommission and repurpose the Komati coal-fired power plant near Middelburg towards transitioning South Africa from fossil fuels to a reliable, affordable and sustainable energy grid.
The Komati Just Energy Transition Project (KJETP) will create opportunities for local workers and communities and aims to help mitigate climate change, enhance energy security and support economic opportunities in the Komati area.
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The enormous boost is aligned with South Africa’s Just Transition Framework, which aims to minimise the socio-economic impacts of the climate transition, improve the livelihoods of those most vulnerable and embrace the opportunities stemming from the transition.
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A portion of the financing will be devoted to creating economic opportunities for local communities and is expected to benefit approximately 15 000 people.
According to the World Bank, this 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 World Bank Group’s president, David Malpass, said, “Reducing greenhouse gas emissions is a difficult challenge worldwide, and particularly in South Africa, given the high-carbon intensity of the energy sector.
“Closing the Komati plant this week is a good first step towards low-carbon development. We are cognisant of the social challenges of the transition and we are partnering with the government, civil society and unions to create economic opportunities for affected workers and communities,” he said.
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The minister of public enterprises, Pravin Gordhan, said, “This project is critical to our understanding of the sustainability of decommissioning, repurposing and mitigating the socio-economic impacts for workers and communities before we scale up the move of the power sector into a low-carbon path.
“It is part of implementing the country’s 2019 Integrated Resource Plan to gradually retire 12GW of our old and inefficient coal-fired power fleet by 2030, and to scale up private sector-led renewables of 18GW during the same period.”
The power sector is a major contributor to greenhouse gas emissions in South Africa, accounting for 41% of CO2 emissions. This is due mainly to Eskom’s fleet composition. Its 15 coal-fired power plants, with an average age of 41 years, provide 38.7GW of the country’s 52.5GW installed capacity.
The repurposing of the plant will enhance energy security in South Africa with the installation of a combination of 220MW renewable energy solutions (including 150MW solar PV solar and 70MW wind) and 150MW batteries, which together will help to improve the quality of electricity supply and grid stability.
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Under the KJETP, the workers will be supported through a comprehensive transition plan, elaborated jointly with inputs from staff and unions.
Options for the affected workers will include transfers to other Eskom facilities, reskilling and upskilling for deployment to the renewable energy plants.
Community-driven projects, skills training, incubation support and business development services for new and existing micro, small, and medium enterprises are expected to create jobs in agriculture, local manufacturing and digital technology. Activities will be carried out in co-ordination with local government, civil society organisations and the private sector.
The KJETP is financed jointly through a $439.5m World Bank loan, a $47.5m concessional loan from the Canadian Clean Energy and Forest Climate Facility, and a $10m grant from the Energy Sector Management Assistance Programme.
