World Bank Approves $1bn for South Africa to Combat Power Crisis
The World Bank on Wednesday, October 25, announced that it has granted a $1 billion loan to assist South Africa in revamping its energy sector. This financial aid is aimed at addressing the country's ongoing power cuts and promote economic growth.
The World Bank intends to support South Africa's efforts to divide Eskom, a struggling power company, and transition towards a more environmentally-friendly economy. The bank's decision aligns with its commitment to foster sustainable reforms in the energy sector.
For several months, South Africa has been facing consistent power outages that occur at intervals. These outages are a result of insufficient electricity production to meet the needs of the country's 62 million inhabitants. The primary source of electricity in South Africa is Eskom, a government-owned utility that generates about 80% of the nation's power using coal stations.
However, due to issues such as mismanagement, corruption, and frequent equipment failures, Eskom has been unable to keep up with the demand for electricity. Eskom frequently experiences breakdowns in their coal-fired power plants, resulting in daily power outages lasting as long as 10 hours.
Marie-Nelly, the world bank director for South Africa, expressed that the government's initiated reforms would have a positive impact on the people of South Africa, especially those in vulnerable households. These reforms would also benefit the economy, contribute to environmental progress, and promote the transition to clean energy.
The Development Policy Loan provided by the World Bank aims to decrease water and air pollution over time by lessening the dependency on coal for generating electricity.
