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AfrElec INVESTMENT AfrElec

World Bank approves $497mn

loan to covert South Africa coal-

fired plant to renewable energy

SOUTH AFRICA THE World Bank board has agreed to lend South installation of a combination of 220MW renew-
Africa $497mn to decommission and repurpose able energy solutions (including 150MW solar
a coal-fired power plant to generate renewable PV solar and 70MW wind) and 150 MW bat-
electricity, according to a release from the Bank. teries, which together will help to improve the
South Africa’s power utility, Eskom, shut quality of electricity supply and grid stability.
down the 56 year-old, 1,000MW Komati power The Komati Just Energy Transition Project
plant in the east of the country on October 31 is financed jointly through a $439.5mn World
ahead of its redesign to produce electricity Bank loan, a $47.5mn concessional loan from
through solar and wind energy. the Canadian Clean Energy and Forest Climate
The World Bank said on Thursday (Novem- Facility (CCEFCF), and a $10mn grant from
ber 3) that the project is aligned with the coun- the Energy Sector Management Assistance Pro-
try’s Just Transition Framework, which aims to gramme (ESMAP).
minimize the socio-economic impact of the cli- “Closing the Komati plant this week is a good
mate transition, improve the livelihoods of the first step toward low carbon development,” said
most vulnerable, and embrace the opportunities World Bank Group President, David Malpass.
stemming from the transition. “We are cognizant of the social challenges of
The decommissioning and repurposing of the transition, and we are partnering with the
the plant is a demonstration project that can government, civil society, and unions to create
serve as a reference on how to transition fos- economic opportunities for affected workers and
sil-fuel assets for future projects in South Africa communities.”
and around the world, the Bank said. The project A portion of the project financing will be
will provide learning experiences through a cycle devoted to creating economic opportunities
of piloting, monitoring, assessing, documenting, for local communities, which is expected to
and information sharing. benefit approximately 15,000 people through
The decommissioning of the Komati coal- community-driven projects, skills training,
fired plant will result in reduced carbon emis- incubation support, and business development
sions and the improvement of ambient air services for new and existing micro, small, and
quality in the vicinity of the plant, the World medium enterprises. It is expected to create jobs
Bank said. The power sector is a major contribu- in agriculture, local manufacturing and digital
tor to greenhouse gas emissions in South Africa, technology.
accounting for 41 percent of its CO2 emissions. “It is part of implementing the country’s Inte-
This is due mainly to Eskom’s fleet composition. grated Resource Plan 2019 to gradually retire
Its 15 coal-fired power plants, with an average 12GW of our old and inefficient coal-fired power
age of 41 years, provide 38.7GW of the country’s fleet by 2030 and to scale up private sector-led
52.5GW installed capacity. renewables of 18GW during the same period,”
The repurposing of the plant will enhance said South Africa Minister of Public Enterprises,
energy security in South Africa, with the Pravin Gordhan.™

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