Press release: groundWork South Africa, Sierra Club, Friends of the Earth U.S., Pacific Environment
FOR IMMEDIATE RELEASE:
April 14, 2011
CONTACT:
Sunita Dubey, groundWork South Africa, Phone: +1 (703) 732-2559
Justin Guay, Sierra Club, Phone: +1 202-664-6460
Doug Norlen, Pacific Environment, Phone: +1 202-465-1650
Karen Orenstein, Friends of the Earth U.S., Phone: +1-202-222-0717
US Ex-Im Bank Finances Largest Carbon Emitting Project in its History
South African Mega Coal Project Raises Concerns of Injustice, Outdated Energy Investments, and Lack of Job Creation
Washington D.C. --
Today the Board of Directors of the U.S. Export-Import Bank (Ex-Im
Bank) voted to approve $805 million dollars in subsidized financing for
one of the world’s largest coal fired power plants, the 4,800 Megawatt
Kusile project, in South Africa. South African and international civil
society organizations and U.S. medical experts strongly oppose Ex-Im
Bank financing of Kusile as a heavily polluting project that will harm
the health and well-being of South Africans. The project
reflects an increasing trend at the agency to focus U.S. exports on
fossil fuels at the expense of renewable energy alternatives.
The
area where Kusile would be built already exceeds permitted ambient
levels of hazardous air pollutants that create soot & smog. These
and other pollutants that result from coal combustion can cause harm to
respiratory, cardiovascular, and nervous systems, leading to heart
disease, cancer, stroke, and chronic lower respiratory diseases,
according to Physicians for Social Responsibility.[1] The externalized costs created by such pollution should have been incorporated - but were not - into the Ex-Im Bank's decision, according to experts at Harvard Medical School. [2]
“Ex-Im Bank Directors’ decision to support Kusile was made despite their full knowledge of the unacceptable damage the project will cause,” said Sunita Dubey, U.S. Representative of Groundwork South Africa, a leading civil society organization opposing Kusile. “They have completely disregarded the impact on people’s health and livelihoods.”
On April 13, South African civil society leaders made a final appeal to the US Ambassador to South Africa to intervene to stop Ex-Im Bank’s financing from going forward. [3]
On top of the heavy pollution poor communities will bear, the Kusile project will not bring energy access to South Africa’s poor, and does not even include electrification lines for them. What’s worse, Apartheid-era “special pricing agreements” give large industrial users, which consume the lion’s share of South Africa’s electricity, guaranteed rates that are among the lowest in the world. This will force the every-day consumer to bear the weight of these rate increases—on top of the billions of dollars borrowed for the total project cost to build Kusile.
“It becomes a question of who benefits and who pays the price. In this case the poor pay the price and large corporations reap the benefit,” said Sunita Dubey.
The massive Kusile coal fired power plant will spew 30.5 million tons of C02 annually - increasing South African energy sector emissions by 12.8 percent and the country’s total contribution to climate change by 9 percent. Ironically, Durban, South Africa will be the site of global climate talks later this year.
“Ex-Im Bank’s decision places US climate change negotiators in a very tough position,” said Erich Pica, President, Friends of the Earth U.S. “How can they convince the world they care about climate change this December when earlier the same year they subsidized one of the world’s largest sources of climate pollution? This undermines their credibility.”
Kusile will emit more greenhouse gasses annually than any project in Ex-Im Bank’s history, and 50 percent more than all greenhouse gas-emitting projects financed by Ex-Im Bank in 2010. [4]
“Ex-Im Bank has a Carbon Policy that doesn’t curb carbon and an energy portfolio that remains over 90 percent fossil fuel based,” said Doug Norlen, Policy Director, Pacific Environment.
Civil society advocates also decried the cost of job creation associated with Kusile. It is rumored that Ex-Im Bank’s $805 million loan for Kusile will support a mere 100 jobs over 5 years. That works out to about $1.6 million per job per year.
U.S. civil society advocates are particularly dismayed as this financing also undermines the opportunity to position the U.S. as a leader in renewable energy and energy efficiency technologies. The U.S. Congress has mandated the agency to extend ten percent of its annual financing to renewable energy, which it routinely fails to even come close.
“Ex-Im Bank is missing an enormous opportunity to position the U.S. as a leader in clean technology markets worldwide,” stated Justin Guay, Sierra Club International Climate Program Representative. “Instead, we are chaining our economy to a 19th century technology while countries worldwide are busy transitioning to the 21st century. We are putting off the inevitable and it is hurting our economic recovery, job creation, and our global environment.”
|
Ex Im Bank Energy Portfolio 2005-2010 |
|
Congressional Renewable Energy Mandate |
For more information, please find fact sheets at these links:
http://action.sierraclub.org/site/DocServer/Kusile_Power_Project_Factsheet.pdf?docID=5541
http://www.banktrack.org/show/dodgydeals/kusile_coal_power_plant
http://action.sierraclub.org/ExImFossilFuelFinancing
About Groundwork South Africa: www.groundwork.org.za
About Pacific Environment: www.pacificenvironment.org
About Friends of the Earth: www.foe.org
About Sierra Club: www.sierraclub.org
[1] See March 14, 2011 letter to Ex-Im Bank Chairman Fred Hochberg from
Kristen Welker-Hood, ScD MSN RN, available at
http://www.foe.org/sites/default/files/PSR%20letter_0.pdf.
[2] See March 4, 2011 letter to Ex-Im Bank's Directors from Paul R Epstein, M.D, M.P.H.
Center for Health and the Global Environment Harvard Medical School, available at http://www.foe.org/sites/default/files/3-11%20epstein%20letter_0.pdf
[3] See the NGO appeal letter to the Ambassador at http://tinyurl.com/4xhsgoy
[4] According to Ex-Im Bank's FY 2010 Annual Report, in that year the
agency financed fossil fuel power projects, oil-field and gas-field
exploration, development and production projects, an oil-refinery
project and an LNG project with an associated gas pipeline with annual
emissions totaling just over 20 million tons of CO2. See Ex-Im Bank FY 2010 Annual Report, FY At A Glance, Energy, page 15, available at http://www.exim.gov/about/reports/ar/2010/exim_2010annualreport_full.pdf