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The Government is considering blocking an aid project to provide reliable coal-fired electricity for millions of South Africans after coming under intense pressure from green groups in the run-up to the election.

On Thursday, Britain will cast the deciding vote on whether the World Bank should grant a $3.7 billion (£2.4 billion) loan to allow South Africa to build the Medupi coal plant.

It would be bigger than Drax, Britain’s largest coal plant, and pump out an estimated 25 million tonnes of carbon dioxide a year into the atmosphere.

But it would reduce the risk of power cuts, which have caused billions of pounds of damage to South Africa’s economy in the past two years. The national grid came close to collapsing in 2008 and the South African Government was forced to impose rolling blackouts.

Greenpeace, Friends of the Earth and Christian Aid argue that the risk to the world’s climate from the plant’s emissions outweighs the benefits of the secure electricity it would supply.

They have been lobbying behind the scenes to try to persuade Britain to vote against the loan. They have held meetings in recent days with Gareth Thomas, the Minister for International Development, Michael Jacobs, the Prime Minister’s special adviser on climate change, and Susanna Moorhead, head of the World Bank in Britain.

The Government had been inclined to support the loan but is now wavering and may vote against it in Washington on Thursday, partly because it does not want to offend green supporters before the election.

The green groups argue that South Africa should focus instead on building wind turbines, solar panels and other sources of renewable electricity. These sources cost more than twice as much per unit of electricity compared with coal, which South Africa has in abundance.

Pravin Gordhan, the South African Finance Minister, accused green groups of trying to impose their environmental priorities on a country lacking the secure electricity that is taken for granted in the developed world.

“It is regrettable that . . . developed countries and very small group of NGOs in South Africa are putting their environmental concerns, which can’t be immediately addressed, above the economic needs of South Africa and our need to grow the economy so that all the people benefit.

“For now, not only South Africa but developing countries more generally will have to rely on coal.”

The World Bank said that it had studied the less-polluting alternatives to the Medupi plant and none could provide enough capacity in time to avoid widespread power cuts.

It is urging Britain and other contributors to vote in favour of the loan and said in a report: “The project will help avoid an energy crisis across southern Africa.

“Without energy, countries face very limited or no economic growth: factories and businesses cannot function efficiently; hospitals and schools cannot operate fully or safely; basic services that people in rich countries take for granted cannot be offered.”

The proposed World Bank loan includes $260 million for wind and solar power and $490 million for measures to reduce the coal plant’s overall emissions, including a new rail line to transport coal rather than using lorries.

The green groups wrote last month to Douglas Alexander, the International Development Secretary, urging him to vote against the loan on the grounds that it would “undermine the global fight against climate change” and would not reduce fuel poverty.

It said: “While there is significant energy poverty in South Africa this project is not focused on meeting the needs of poor communities but instead on supplying energy to major energy-intensive industrial users that already have access to some of the cheapest electricity in the world.”

Britain, the bank’s biggest donor and one of its five major shareholders, is expected to determine the outcome of the vote because the US is likely to abstain. Despite generating half its own electricity from coal, the US has adopted new guidelines that include a strong assumption against approving World Bank loans for coal plants in developing countries.

The Department for International Development said that it had not yet decided how to vote. “The UK is in ongoing dialogue with the World Bank and the Government of South Africa regarding the loan. We will take a final position on the project when it comes to the World Bank board on April 8.”

The Times, 6 April 2010