Your Tax Dollars at Work: A Giant Coal Plant in South Africa
Officials say a new US-backed coal plant outside Johannesburg will be a boon to the community. Locals beg to differ.
Earlier this week, I traveled to South Africa's Mpumalanga province, the center of the country's coal industry and the home of one of the newest coal-fired power plants, Kusile. Most Americans would probably be surprised to learn that their tax dollars have been used to underwrite Kusile, but they are. And when completed, the 4,800-megawatt plant will be among the largest in the world.
EMalahleni, the municipality in which Kusile is located, means "place of coal" in Zulu. Ninety-three percent of South Africa's power comes frmo coal, and much of that is produced and burned in Mpumalanga.* While much of it is burned in the region's 11 power plants, 25 percent of it is exported to other countries. South Africa is the fifth-largest producer of coal in the world, and 80 percent of its mining takes place in this province.
A significant chunk of Kusile's upfront financing—$805 million—came from a direct loan from the Export-Import Bank of the United States to Eskom, South Africa's state-owned electric power utility. Construction on the plant began in 2007 and is expected to be completed in 2015. In April 2011, ExIm agreed to provide the loan to the plant to help ensure its construction. Kusile will be the 12th coal-fired power plant in this area, which lies to the east of Johannesburg.
The region is also home to the Sasol plant in Secunda, which is both the largest coal-to-liquids plant and the largest point source of greenhouse gas emissions in the world. The plant produces 160,000 barrels of fuel from coal every day, which is used to power buses, planes, and automobiles in the country.