World Bank approves funding for Komati

The World Bank has approved South Africa’s request for funding to repurpose Eskom’s recently decommissioned coal-fired Komati power station in Mpumalanga by using renewables.

The bulk of the R9 billion Komati Just Energy Transition Project will be financed through a R8 billion World Bank loan. There is also a R870 million concessional loan from the Canadian-World Bank Clean Energy and Forest Climate Facility, and a R183 million grant from the World Bank’s Energy Sector Management Assistance Programme.

The plant, which has been operating since 1961, had its final generating unit taken offline at midday on Monday, state-owned power utility Eskom said. The repurposing project will convert Komati into a renewable generation site powered with 150MW of solar, 70MW of wind and 150MW of storage batteries.

It was also hoped that the project would serve as a global reference on how to transition fossil-fuel assets.

"Reducing greenhouse gas emissions is a difficult challenge worldwide, and particularly in South Africa given the high carbon intensity of the energy sector," said World Bank Group President David Malpass.

"Closing the Komati plant this week is a good first step toward 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."

Air

The decommissioning is also expected to result in an improvement in air quality in the area around the plant.

"This project is critical to our understanding of the sustainability of decommissioning, repurposing, and mitigating the socioeconomic impacts for workers and communities before we scale up the move of the power sector into a low-carbon path," Public Enterprises Minister Pravin Gordhan said.

"It is part of implementing the country’s Integrated Resource Plan 2019 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."

Under the project, former workers will be supported through a "transition plan", with input from staff and unions.

"Options for the affected workers will include transfers to other Eskom facilities, re-skilling, and upskilling for deployment to the renewable energy plants," the World Bank said.

"A portion of project financing will be devoted to creating economic opportunities for local communities, which is expected to benefit approximately 15 000 people."-Fin24