US Ex-Im Bank urged to deny funding to Kusile power project

19th January 2011 By: Martin Creamer - Creamer Media Editor

An environmental group is urging a US government-funded bank to deny finance to South Africa’s coal-fired Kusile power-station project, Milwaukee’s Journal Sentinal reports.

Milwaukee hosts two giant mining machine companies – Bucyrus International and Joy Global – which have asked the bank to provide certain loan-guarantee underpinning for the Kusile project in order to place them in a favourable position to win a contract to build a coal-mining dragline that would take 30 months to manufacture at a cost of some $120-million.

"We know the mine would need a dragline. If the Export-Import Bank processes this decision the way we hope they will, it means jobs in Milwaukee, one way or the other," the publication quotes Bucyrus executive Tim Sullivan as saying.

But this has come up against the Friends of the Earth policy coordinator Karen Orenstein, who is urging Washington not to allow the country's Export-Import Bank (Ex-Im) to provide finance to underpin Kusile, on the grounds that the power station will emit 36,8-million tons of carbon dioxide, as well as toxins and heavy metals such as arsenic and mercury.

The environmental group is also urging the bank, which has already given some early approvals to Kusile’s environmentally friendly water conservation and air-pollution abatement features, to “end its fossil-fuel binge”.

The Kusile financing is similar to a recent Ex-Im loan guarantee in India, which nearly fell through on environmental grounds, but was finally granted under pressure from a Wisconsin congressional delegation and the White House.

US Ex-Im president Fred Hochberg, who sees the financing as helping South Africa to ramp up its energy capacity, is reported as saying that it might still take some time for the bank arrives at its final decision on the South African financing.