FOSSILIZED THINKING

This report by the Center for International Environmental Law (CIEL) critiques the World Bank's 3.75 billion dollar loan to Eskom Holding Limited for the Eskom Investment Support Project in South Africa. The authors argue that the Bank failed to comply with its own Operational Policy 10.04 (OP 10.04) by neglecting to fully quantify and incorporate environmental and social externalities—specifically regarding water scarcity, air quality, and transboundary impacts—into the project's Economic Evaluation, thereby overstating the project's net benefits.

• The World Bank approved a 3.75 billion dollar loan to Eskom Holding Limited in early 2010, primarily to fund the 4,800 MW Medupi coal-fired power plant. While the loan included 260 million dollars for renewable energy (the Sere Wind and Upington Solar projects) and a low carbon rail project, the funding for coal significantly outweighed these components.
• The report asserts that the World Bank violated Operational Policy 10.04 (OP 10.04) by failing to adequately factor environmental and social externalities into the Economic Evaluation of the Eskom project. This omission resulted in a skewed and overly positive assessment of the project's net present value.
• The Bank failed to evaluate transboundary impacts, despite the Medupi plant's proximity to the Botswana border and its reliance on tributaries of the Limpopo River. The report notes that air pollution and water scarcity could negatively affect agriculture and communities in Botswana, Zimbabwe, and Mozambique.
• Water scarcity concerns were underestimated because the Bank focused on the use of 'dry cooling' while ignoring the high water demands of wet flue gas desulphurization (FGD) used to abate SO2 emissions. Operation with wet FGD is projected to require 12 million m3 of water per year, compared to 6 million m3 without it.
• The Economic Analysis failed to quantify health costs associated with air pollution, specifically sulfur dioxide (SO2) and particulate matter. The report highlights that the Medupi plant is located in a recognized air pollution "hot zone" and that emissions could exceed air quality thresholds, impacting the 100,000 residents of the Lephalale Local Municipality.
• The report challenges the Bank's claim that net GHG emissions from Medupi would be lower (12.6 million tons/year) than gross emissions (30 million tons/year) by assuming coal power would replace emissions-intensive sources like kerosene and diesel. The authors argue this assumes the electricity will actually reach and be affordable for those populations.

APA

Amerasinghe, N., & Porter, S. (2011). FOSSILIZED THINKING. Center for International Environmental Law. https://www.ciel.org/wp-content/uploads/2014/11/FossilThinking_Eskom_21Mar11.pdf

Chicago

Amerasinghe, Niranjali, and Stephen Porter. FOSSILIZED THINKING. Center for International Environmental Law, 2011. https://www.ciel.org/wp-content/uploads/2014/11/FossilThinking_Eskom_21Mar11.pdf.

Wikipedia

{{cite report |last1=Amerasinghe |first1=Niranjali |last2=Porter |first2=Stephen |title=FOSSILIZED THINKING |publisher=Center for International Environmental Law |date=March 2011 |url=https://www.ciel.org/wp-content/uploads/2014/11/FossilThinking_Eskom_21Mar11.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{amerasinghe2011fossilized, author = {Amerasinghe, Niranjali and Porter, Stephen}, title = {{FOSSILIZED THINKING}}, institution = {Center for International Environmental Law}, year = {2011}, month = mar, url = {https://www.ciel.org/wp-content/uploads/2014/11/FossilThinking_Eskom_21Mar11.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }