World Bank Grants South Africa $497 Million for Transition From Coal

After getting $8.5 billion of loans and grants for the development of greener energy sources last year, the continent's largest industry is further financed by the global institution to move from fossil fuel.

$497 million was donated to South Africa for conversion of one of its old coal-fired power plants, said the World Bank in a statement on Friday.

"The World Bank approves $497 million in financing to reduce greenhouse gas emissions in South Africa and support a just transition," the institution declared.

The Komati power plant in the northern province of Mpumalanga had been operating for more than 60 years before being shut down on Monday. The station had nine generating units and consumed up to 12,000 tonnes of coal per day. At the time its construction was completed, it produced twice as much electricity as all the country's other power plants.

According to the World Bank, the Komati plant will be converted into an energy-producing facility powered by 150 megawatts (MW) of solar panels, 70MW of wind turbines and 150MW of batteries. The World bank expressed confidence that the changes will be able "to improve the quality of electricity supply and grid stability".

South Africa has long been facing problems with electricity supply that often include blackouts. The nation's government is working to find a solution to the power problem. The African National Energy Crisis Committee of Ministers, founded by President of South Africa Cyril Ramaphosa, developed a number of solutions to deal with the energy crisis by August 1 of this year.

"Reducing greenhouse gas emissions is a difficult challenge worldwide, particularly in South Africa given the high carbon intensity of the energy sector," said David Malpass, the institution's president.

South Africa is a significant carbon gas emitter for the continent, with 80% of its industry still dependent on coal. Some 100,000 people work in the South African coal sector. Ahead of the 2022 United Nations Climate Change Conference (COP27), discussions about the country's transition to cleaner or renewable energy sources future have intensified.

To achieve carbon neutrality by 2050, South Africa is in need of at least $500 billion, as pointed out by the World Bank.