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How a Development Bank is Propping Up the Fossil Fuel Industry in South Africa. And Why it Must Reverse Course

Local communities are not the only ones who are going to pay the bitter price of reckless and backward-looking investment choices.

Aerial view of Black Wattle Colliery Opencast Coal Mine, Middelburg,RSA. (Photo: © 350.org/Zac Modirapula)

Aerial view of Black Wattle Colliery Opencast Coal Mine, Middelburg,RSA. (Photo: © 350.org/Zac Modirapula)

The following is the second piece in a two-part series, in partnership with 350.org, on coal communities in South Africa. Read the first article here.

South Africa is grappling with a serious energy crisis.

Communities across the country are crippled by the lack of electricity, a situation worsened by the widespread lack of jobs. A straightforward solution to both problems would be investing in distributed and small scale renewable energy, particularly in rural areas.

Instead, the country is still doubling down on coal, with a new coal fired power plant called Thabametsi set to open in Lephalale, Limpopo province.

Regrettably, the project can count on the financial contribution of the Development Bank of Southern Africa (DBSA), whose stated mission would be “to advance the development impact in the region,” among other things by “implementing sustainable development solutions to: improve the quality of life of people through the development of social infrastructure; support economic growth through the investment in economic infrastructure; support regional integration and to promote sustainable use of scarce resource.”

Clearly, investing in Thabametsi would be a reckless abandonment of DBSA’s mandate. For a development bank which aims to “improve the quality of life of people,” it’s puzzling that no one stopped to consider the hard evidence: an investment of this nature carries heavy health costs.

But local communities are not the only ones who are going to pay the bitter price of reckless and backward-looking investment choices. It is equally concerning that the DBSA is considering an investment in new coal fired infrastructure despite knowing how fossil fuels drive climate change, in turn affecting more and more the same communities which it would be its mission to serve.  

The drive to end poverty is urgent, but this cannot be done to the detriment of the very people one sets out to lift out of poverty.

Kids playing after school in Valbank,Middelburg,RSA Image: © 350.org/Leroy Jason

To avoid betraying its mission statement, the DBSA needs to put community values and sustainability at the core of its business model. The bank also needs to consider the impact of fossil fuels on South Africa’s people.

Divesting away from coal and increasing investment in renewable energy will show that the DBSA is committed to achieving its mandate in a responsible and meaningful manner.

This is why 350.org is calling directly on DBSA’s Board Chair Jabu Moloketi, his deputy Frans Baleni and the CEO Patrick Khulekani Dlamini to commit the bank not to invest in Thabametsi. You can sign up here.

We owe it to the young and innocent children who play in those coal-affected communities, to offer them a fighting chance to create a better tomorrow for themselves. We are responsible for creating opportunities that allow the disenfranchised youth, not only in Limpopo but also across the country, to move towards renewables. It is time to serve the real interests of the people and the climate by saying, unequivocally, “no” to coal.

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Ahmed Mokgopo

Ahmed Mokgopo is Africa Regional divestment campaigner for 350.org. He is a Johannesburg based campaigns consultant leading on calls for climate action. Ahmed believes that climate change is set to be Africa’s most serious social and economic threat, by shifting money away from the fossil fuel sector, accelerating a just transition, and investing in clean, sustainable energy he believes we can avoid large scale climate disruption. Ahmed holds an MA in International Development from the University of Sussex.

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