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SOUTH AFRICA – The World Bank will loan South Africa US$1billion (£827 million) to help the country resolve its energy crisis as it battles with its worst-ever power cuts.
BBC reports that the power cuts had existed since 2007 but have escalated in recent years, causing blackouts of up to 16 hours a day.
According to the World Bank, the frequent power cuts have severely impacted South Africa’s economy, slowing its Gross Domestic Product (GDP) growth by nearly three percent.
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“The loan endorses a significant and strategic response to South Africa’s ongoing energy crisis and the country’s goal of transitioning to a just and low carbon economy,” the World Bank said in a statement on Wednesday, after its board approved the loan.
More than 80 percent of South Africa’s electricity is generated by coal-fired power. As a result, the country is ranked as the world’s 14th largest emitter of carbon dioxide globally.
The World Bank said that the loan would allow South Africa to reform the country’s state-owned power company, Eskom, which has more than US$26 billion of debt.
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