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Medupi coal power plant South Africa
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By: BankTrack
Created before Nov 2016
Last update: 2021-12-16 00:00:00

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Sector Coal Electric Power Generation
Location
Status
Planning
Design
Agreement
Construction
Operation
Closure
Decommission
Website http://www.eskom.co.za/

About Medupi coal power plant

The Medupi Power Station is a coal-fired power plant located in Lephalale, South Africa, which was completed in mid-2021. The plant comprises six 794 megawatt units to provide a total installed capacity of 4,764 megawatts. It is owned and operated by the South African public utility company Eskom, the world’s most polluting power company, and is expected to be operational for 50 years. It is the  fourth largest coal power plant in the world (with another new Eskom power plant, Kusile, coming third).

Medupi’s coal supply is sourced from Exxaro’s Grootegeluk coal mine, which will have to increase production by 14.6 million tonnes a year to supply the new power plant. 

Medupi was meant to come online in 2013, but the first power to be produced by the plant came from only one of its six units in March 2015. Eskom adjusted its expectations for full synchronisation to the power grid of all six units several times and announced the completion of the power plant’s last unit on July 31, 2021. 

Latest developments

Explosion put Medupi’s unit 4 out of service for at least a year, says Eskom

2021-08-08 00:00:00

After billions in cost overruns, design flaws, delays and load shedding, Medupi is complete

2021-08-02 00:00:00

Why this profile?

Contrary to Eskom’s claim and justification for continuing to build new coal power plants, the Medupi coal power plant will not support poverty alleviation but will instead add costs onto ordinary South African energy customers. In addition, the company is seeking exemptions to minimum emission standards while pollution from the power plant would already lead to 1.4 deaths and an additional 144 hospitalisations per year. At full capacity, the Medupi plant is projected to emit between 25 and 30 million tonnes of carbon dioxide per year, making it one of the most carbon intensive power plants in the world.

What must happen

Following the Global Coal Exit List, financial institutions should refrain from providing any financial services to Eskom, especially if funding would be allocated to maintenance, repairs (e.g. Unit 4) or expansion of the Medupi power station. Banks should urge Eskom to decommission its coal power stations sooner than the 2050 goal set by the utility and direct their capital at energy efficiency and renewable energy financing opportunities.

Impacts

Social and human rights impacts

Energy access and prices

South Africa has suffered several severe energy shocks in recent years, which cause significant damage to the South African economy. This reflects many years of little or no investment in energy infrastructure. Eskom and the South African Government have suggested that new coal-fired capacity will enable South Africa to guard against future power shortages, support industry and sustain growth. This, in turn, they claim, will assist South African development, and alleviate poverty.

However, the Medupi project will not support sustainable development and poverty alleviation but will instead add costs onto ordinary South African energy customers. Over the last decade, South Africans faced repeated electricity price increases as well as significant energy access challenges, including millions of electricity disconnections and periodic load shedding. Despite the progressive production at Medupi power station, Eskom is still failing to address power shortages due to numerous defects.  

While the extractive sector benefits from cheap electricity thanks to multi-decade special purchase agreements, the cost of constructing the coal plant is likely to be borne by all South African citizens. A 2018 report from the Energy Research Centre at the University of Cape Town states that the cost overruns at the new coal-fired plants contributed to the rapidly increasing electricity prices. Between 2011 and 2021, the average yearly electricity price increase has been close to 10%. In addition, South Africa’s mines and smelting operations use around 40% of the country's energy and export their profits, contributing to South Africa’s huge current account deficit.

Health 

A 2006 report by Eskom, which it was forced to disclose after the Centre for Environmental Rights filed a Promotion of Access to Information Act application in 2014, contained information about the health aspects of the Medupi power plant. It stated that when operational, Medupi would be responsible for 1.4 deaths and an additional 144 hospitalisations per year, among those living within 25 km of the power station. Several studies underlined the consequences of the Medupi pollution including premature deaths, chronic bronchitis, and asthma. 

Health risks due to air pollution could be decreased if flue gas desulphurisation (FGD) technology, known as scrubbers, was installed. Scrubbers indeed allow for a reduction of sulphur dioxide (SO2) emissions and were a condition of Eskom’s loan agreement with the World Bank. Yet Eskom failed to install the ZAR38 billion FGD equipment and in July 2021, the World Bank approved the extension of the FGD implementation deadline from 30 June 2025 to 30 June 2027. According to Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air, the emission-compliance exemptions sought by Eskom will cause a high number of premature deaths and therefore constitute “a health and economic burden that far exceeds the costs of the equipment required to comply with the standards”. 

Working conditions 

The project has been subject to several strikes over the years, with workers demanding better working conditions and wages, and complaining about discrimination. A strike in March 2015 led to contract termination of 1,000 employees.  

Alleged disturbance and destruction of graves

The construction operations of the Medupi power station are also linked to the alleged destruction of graves. A memorial site was created in 2016 to allow affected families to commemorate their deceased. 

Environmental and climate impacts

Climate change 

At full capacity, the Medupi plant is projected to emit between 25 and 30 million tonnes of carbon dioxide per year, making it one of the most carbon intensive power plants in the world. Putting these emissions in context, the total carbon emissions of South Africa are between 400 and 450 million tonnes per year. Eskom alone currently emits over 210 million tonnes of CO2 equivalent a year. South Africa’s power sector is one of the most carbon intensive in the world, and the country is responsible for about 40% of the entire total of African emissions. 

Demand for coal from power stations such as Medupi is also likely to drive coal mining expansion in South Africa, with devastating local environmental impacts. The Medupi power plant is expected to consume around 15 tonnes of coal per year. If all Eskom’s plans go ahead, the company’s own consultants anticipate that 35 new mines will be required to support them. 

Water resources 

The Medupi power plant will also be extremely water-hungry, taking up essential water supplies in a country where scarce water resources are already compromised by mining activities. The plant has been built in the water-scarce region of Lephalale in the Limpopo province. The Mokolo Dam is currently providing the water supply for all agricultural, mining and power generating activities in the vicinity. The capacity of this dam is insufficient to meet the water requirements of the Medupi power plant. Eskom’s current licence allows the company to take 10.9 million cubic metres of water a year from the dam, and the FGD equipment is expected to generate an additional demand of 4.5 million cubic metres a year. 

The investigation report of the World Bank inspection panel, dating back to November 2011, confirms that the plant will put additional strain on water consumption and create additional pollution risks. 

To address industrial water needs, the Mokolo and Crocodile River Water Augmentation Project (MCWAP) plans to increase pipeline capacity from the Mokolo Dam from 13.5 million to 50.4 million cubic meters of water per year (Phase 1) and to construct a pipeline of approximately 130 km to transfer water from the Crocodile River (West) to the Lephalale area (Phase 2A). However, this water augmentation project is expected to have significant effects on farming water resources. The MCWAP-2A obtained an environmental impact assessment (EIA) authorisation from the Department of Environmental Affairs in December 2018 but the decision was appealed by Earthlife Africa and Groundwork. 

Illegal sand mining

The significant amount of concrete needed to build Medupi also caused disproportionate sand mining activities in the lower Mokolo riverbed, close to Lephalale. Local farmers argued that sand mining put the health of the river and crop irrigation at risk. According to Groundwork, just under 500 000 m3 of sand were extracted to build Medupi. Moreover, the World Bank Inspection Panel already acknowledged in 2011 that the allegations of harm caused by sand mining on ground water availability were credible.  

 

Governance

Timeline

Explosion put Medupi’s unit 4 out of service for at least a year, says Eskom

2021-08-08 00:00:00

The Medupi coal-fired power plant in Limpopo experienced an explosion at its unit 4 generator on 8 August. While the explosion caused severe damage to the generator, seven employees were treated for shock, but no injuries or fatalities were reported.

After billions in cost overruns, design flaws, delays and load shedding, Medupi is complete

2021-08-02 00:00:00

Six years after the first unit began supplying power to the grid, the sixth and last generating unit at Eskom's Medupi coal power station in Lephalale, Limpopo, has reached commercial operation. 

Eskom contractors fire more than 1,000 workers over "illegal Medupi strike"

2015-03-25 00:00:00

More than 3,000 contract workers went on strike today to complain about poor pay and discrimination. As a response to the strike, Eskom has halted operations on the power plant for safety and security reasons.

First unit of Medupi power plant online

2015-03-02 00:00:00

According to Eskom: Medupi has achieved a significant stage in its construction by the synchronisation of its first unit on 2 March 2015 to the National grid. Within the next three to six months, South Africa will see Medupi unit 6's full potential of 794 megawatt being fed into the South African national grid.

Delay of first unit

2013-07-08 00:00:00

In July 2013 Eskom announced that synchronization of the first unit of the power plant to the South African electricity grid would be delayed until 2014, and full operation by 2017, due to rising costs. 

World Bank report

2011-11-21 00:00:00

An investigative report of the Inspection Panel of the World Bank has reported several issues in regards to the Medupi power plant: significant water consumption, raising issues of both scarcity and pollution in the local area; emission of gases and particulates causing increased health problems in the local area; added burden on the limited institutional and financial capacity of local authorities that have to cope with rapid industrialization of the area, especially as related to public and social infrastructure and environmental management; and emissions of greenhouse gases by the Medupi Power Plant.  Read more .... 

Operations resume

2011-05-26 00:00:00

 

After weeks of protests at both Medupi and Kusile, the Medupi power plant resumed operation on May 23, 2011. Operations on Kusile have only been partially resumed while talks continue to end the protests. The protests began when foreigners were hired as welders while other local contacts were being ended. 

Eskom confirmed in April that the first of six 800 megawatt units, Unit 6, at its Medupi coal-fired power station should start supplying power to the national grid in the third quarter of 2012. In September 2010, they acknowledged that the commissioning of the unit faced a three-month delay and that it would not be commissioned by June 2012.

In the summer of 2010, the World Bank Inspection Panel, the grievance mechanism of the World Bank, was authorized to launch a full investigation in the approved loan for the Medupi Coal plant. In particular, the investigation is centred on the alleged policy violations of the World Bank's USD3.75 billion loan to Eskom. The decision was driven by the local opposition to the plant and the formal complaint filed by local NGOs. Many civil society groups commended the decision for the investigation, as many worry of the negative public health and environmental impacts, as well as impacts on community members' economic opportunities and standards of living. The World Bank reviewed its Energy Strategy, with the aim of putting in place a new strategy in 2011 to guide its energy lending portfolio for the next decade. The hope is that the findings from the Inspection Panel will convince the World Bank that fossil fuels must not receive limited financial resources. Click here for more information.

The World Bank has already approved USD3.75 billion in April 2011 for Medupi along with USD1.25 billion from African Development Bank. In 2010 the US abstained from voting on this funding application to the World Bank of Eskom for the Medupi plant, but one year later the US Export and Import Bank approved USD800 million for financing the Kusile coal power plant.

World Bank approves loan for Eskom Medupi coal plant

2010-04-08 00:00:00

The World Bank on Thursday approved a controversial $3.75 billion loan to develop a coal-fired power plant in South Africa despite the lack of support from the United States, Netherlands and Britain due to environmental and other concerns.

Financiers

Due to large cost overruns, the estimated cost of the Medupi power station rose from ZAR 80 billion in 2007 to ZAR 234 billion in 2019. In March 2021, Eskom announced that, to complete the station, the company will have financed a total of ZAR 145 billion through its own capital reserves. Based on a 47-53% debt equity ratio, the global cost of the project comes close to ZAR 273.6 billion (appr. USD 17 billion).

Different multilateral banks financed the Medupi coal-fired power plant:

  • In 2010, the World Bank provided a loan to Eskom of USD 3.05 billion;
  • Public finance also included USD 2.6 billion from the African Development Bank;
  • In July 2017, Eskom signed a USD 1.5 billion loan agreement with China Development Bank, which added up to a USD 500 million loan contracted with the same bank in October 2016.

Related companies

Alstom France

Contractor

Eskom South Africa show profile

Nuclear Electric Power Generation | Coal Electric Power Generation

Evonik Industries Germany

Evonik is working on the construction of the Medupi power plant.

Exxaro South Africa

Coal from Exxaro's Grootgeluk mine will fuel the Medupi coal power plant.

Hitachi Japan

Contractor

Siemens Germany

Took over from Alstom on the control and instrumentation works for the Medupi power plant

News

| |
Type:
Year:
blog
external news
our news

Eskom was just denied a licence to pollute. Now it is worried about keeping the lights on

Eskom was recently named the worst sulphur dioxide polluter in the world – and it is barely even trying, according to a rejection letter
2021-12-14 | Business Insider South Africa
blog
external news
our news

The anatomy of a disaster: A short history of Eskom and South Africa’s reliance on coal

2021-10-18 | Daily Maverick
blog
external news
our news

Eskom named planet’s largest emitter

A new study released by the Center for Research on Energy and Clean Air (CREA) has named Eskom the world’s most polluting company, having overtaken the US, EU and China.
2021-10-07 | ESI Africa
blog
external news
our news

After billions in cost overruns, design flaws, delays and load shedding, Medupi is finally complete

2021-08-02 | Fin24
blog
external news
our news

‘We struggle for water, but power stations and coal mines don’t’

2020-11-26 | Mail & Guardian
blog
external news
our news

The story of South Africa’s biggest power plant, and its little town

2020-04-29 | Mail & Guardian
blog
external news
our news

Medupi’s killer fumes: The story of a power station’s missing air scrubbers

If flue gas desulphurisation technology, which scrubs the fumes of some of the sulphur dioxide emitted, is not installed in the next 10 years, 900 people could die from pollution-related illnesses.
2020-03-03 | The Citizen
blog
external news
our news

Minimum emission standards for Medupi under the spotlight

Eskom has applied for alternative limits in terms of Minimum Emission Standards (MES) for Medupi Power Station.
2019-12-30 | GoLegal
blog
external news
our news

Medupi Unit 2 brought into commercial operation

2019-11-26 | The Citizen
blog
external news
our news

Medupi’s R6.8bn New Development Bank injection and other BRICS climate crimes

Although the $480-million project loan from the New Development Bank for the completion of Medupi has been dubbed ‘clean technology’, it will up the carbon footprint of one of the world’s largest and most expensive coal-fired power plants.
2019-04-10 | Daily Maverick
blog
external news
our news

Medupi Power Station synchronises fifth unit

2018-10-10 | ESI Africa
blog
external news
our news

South Africa's Eskom signs $1.5 billion loan agreement with China

2017-07-06 | Reuters
blog
external news
our news

South African Families Gather to Commemorate Deceased with Memorial Near Medupi Power Plant

Eskom unveiled a memorial wall to commemorate the deceased, whose graves might have been disturbed at its Medupi power plant construction site
2016-07-08 | World Bank
blog
external news
our news

South Africa Coal Projects Collide with Water Scarcity, Financial Turmoil

2016-03-17 | Circle of Blue
blog
external news
our news

Hitachi settlement proves Medupi is "rotten to the core"

2015-09-28 | www.news24.com
blog
external news
our news

How much is Medupi really costing the country?

2015-08-24 | Eyewitness news
blog
external news
our news

Request for Eskom tariff increase of more than 25%

2015-03-20 | Business Day Live
blog
external news
our news

Public Panel Event- Waterberg Electricity

2014-05-26 | Earth Life
blog
external news
our news

BNP Paribas results disastrous for climate and taxation, say campaigners at today’s AGM

2014-05-15 | Paris | Les Amis de la Terre
blog
external news
our news

Alstom épinglé pour les retards d'une centrale à charbon en Afrique du Sud

2013-07-12 | Le Monde
blog
external news
our news

Medupi farce may cost trillion-plus

2013-07-10 | Business Day
blog
external news
our news

Eskom’s new power delayed to 2014

2013-07-08 | Business Report
blog
external news
our news

Medupi, Kusile contractors and unions reach agreement

2013-06-12 | MoneyWeb
blog
external news
our news

Medupi deadline will not change: Gigaba

2013-03-15 | The New Age
blog
external news
our news

Eskom: A company in distress

2013-03-04 | Daily Maverick
blog
external news
our news

High energy users deny subsidies

2013-01-21 | Business Day Live
blog
external news
our news

Nersa’s public hearings continue

2013-01-21 | Business Report
blog
external news
our news

Eskom uses spy agency to counter labour unrest

2013-01-20 | Business Day Live
blog
external news
our news

Medupi operations remain suspended

2013-01-17 | IOl news
blog
external news
our news

Medupi workers march to Eskom

2012-10-19 | Business Report
blog
external news
our news

Investing in water-less green solutions imperative

2012-10-17 | Business Day Live
blog
external news
our news

World Bank fails to correct missteps in Eskom coal project in South Africa

2012-06-04 | BiC website
blog
external news
our news

World Bank agrees: MEDUPI poses social and environmental risk

2012-06-01 | groundWork South Africa
blog
external news
our news

Eskom coal plants might be at risk

2012-05-29 | IOL BusinessReport
blog
external news
our news

Barclays, HSBC and RBS linked to 'dirty financing' for fossil fuels

2011-06-14 | The Ecologist
blog
external news
our news

Eskom resumes Medupi construction after protests

2011-05-23 | South Africa | Reuters
blog
external news
our news

Medupi to go on line in third quarter of 2012

2011-04-11 | South Africa | Engineering News
blog
external news
our news

Eskom set to get $370m loan to fund its renewable energy projects

2011-03-16 | Business Day
blog
external news
our news

Energy, viability of Kusile and Medupi

2011-02-28 | The Project Manager
blog
external news
our news

Court asked to halt river 'vandalism'

2011-02-04 | Mail & Guardian Online
blog
external news
our news

Eskom says it is adhering to global contracting norms at Medupi

2011-01-31 | Engineering News
blog
external news
our news

Medupi (South Africa): Crédit Agricole finances a climate destructive coal project

2010-10-14 | Paris | Les Amis de la Terre
blog
external news
our news

World Bank Inspection Panel Given Green Light to Proceed with Full Investigation into South African Coal Loan

Civil Society Demands that World Bank Reconsider Its Energy Lending Strategy.
2010-08-15 | Friends of the Earth
blog
external news
our news

Counting the cost of Medupi

2010-04-11 | Mail&Guardian
blog
external news
our news

Electricity and water don’t mix

One of Eskom’s major answers to the national power crisis could have catastrophic effects on water supplies in Limpopo, where the huge Medupi power station is being built.
2010-02-27 | The Mail & Guardian

Documents

Type:
Year:
our publications
2022-03-03 00:00:00

Locked out of a Just Transition: fossil fuel financing in Africa

2022-03-03 00:00:00 | BankTrack, Milieudefensie & partners
ngo documents
2021-10-31 00:00:00

Eskom is now the world’s most polluting power company

2021-10-31 00:00:00 | Centre for Research on Energy and Clean Air
other documents
2020-05-31 00:00:00

Water risks of coal driven mega projects in Limpopo: the MCWAP and the EMSEZ

2020-05-31 00:00:00 | Victor Munnik, University of the Witwatersrand
bank documents
2019-12-31 00:00:00

Restructuring paper Eskom investment support project

2019-12-31 00:00:00 | World Bank
ngo documents
2019-07-03 00:00:00

Air quality and health impacts of doubling the South African standards for SO2 emissions from power plants

2019-07-03 00:00:00 | GreenPeace
ngo documents
2018-11-30 00:00:00

Boom and Bust in the Waterberg: A history of coal mega projects

2018-11-30 00:00:00 | GroundWork
other documents
2017-03-31 00:00:00

Health impacts of coal fired power plants in South Africa

2017-03-31 00:00:00 | Dr Mike Holland
other documents
2010-02-18 00:00:00

Recommendations to the World Bank Group on Lending to South Africa for Eskom Investment Support Project that includes a Large Coal Burning Power Station at Medupi

2010-02-18 00:00:00 | Expert panel
ngo documents
2015-10-31 00:00:00

Coal: French banks are not doing the math

2015-10-31 00:00:00 | Les Amis de la Terre, Oxfam France
our publications
2015-05-13 00:00:00

BNP Paribas Coal Bank Briefing 2015

English version
2015-05-13 00:00:00 | BankTrack, Les Amis de la Terre
our publications
2015-05-04 00:00:00

The end of coal?

2015 Coal Finance Report Card
2015-05-04 00:00:00 | BankTrack, Rainforest Action Network, Sierra Club
company documents
2014-02-01 00:00:00

Medupi fact sheet, by Eskom

2014-02-01 00:00:00
other documents
2013-11-04 00:00:00

South Africa - Eskom Investment Support Project

2013-11-04 00:00:00 | World Bank
ngo documents
2011-03-11 00:00:00

Fossilized Thinking: The World Bank, Eskom, and the real cost of coal

2011-03-11 00:00:00 | COEIL
ngo documents
2010-04-03 00:00:00

Statement from South Africa and Africa civil society on Eskom's proposed USD3.75 billion World Bank loan

2010-04-03 00:00:00 | Civil Society Organisations
ngo documents
2010-03-11 00:00:00

UK NGOs letter to UK government on World Bank vote on Medupi

2010-03-11 00:00:00 | UK NGOs
ngo documents
2010-03-01 00:00:00

Eskom World Bank loan factsheet

2010-03-01 00:00:00 | NGOs
ngo documents
2009-12-01 00:00:00

The World Bank and Eskom : Banking on Climate Destruction

2009-12-01 00:00:00 | groundWork (FoE South Africa)
ngo documents
2009-03-01 00:00:00

GroundWork warning letter to the World Bank on Medupi

2009-03-01 00:00:00 | groundWork and many other NGOs

Media

Medupi power plant




Links

FoE US - World Bank Inspection Panel Given Green Light to Proceed with Full Investigation into South African Coal Loan

Civil Society Demands that World Bank Reconsider Its Energy Lending Strategy.

https://foe.org/news/2010-08-world-bank-inspection-panel-given-green-light-to-pro/

Source Watch on Medupi

https://www.gem.wiki/Medupi_Power_Station

FoE US - World Bank urged to vote ‘no’ on Eskom coal loan

Friends of the Earth echoes South Africans’ call for the World Bank to reject a massive dirty coal loan that would lead to more poverty and pollution.

https://www.commondreams.org/newswire/2010/04/07/world-bank-urged-vote-no-eskom-coal-loan

World Bank - Eskom Investment Support Project

https://projects.worldbank.org/en/projects-operations/project-detail/P116410

Brief history

Due to power shortages in 2007, the South-African state-owned electricity company Eskom awarded contracts to build two identical coal-fired power plants. Known as Medupi and Kusile, each plant was designed to have a generating gross capacity of around 4,800 megawatts. The combined output of the plants would represent about 25% of South Africa's power generation capacity. 

Both plants faced significant delays. In August 2015, Medupi’s first unit (Unit 6) was commissioned. Four other units followed between 2017 and 2019. The last unit attained commercial operation status on July 31, 2021. However, an explosion that occurred on August 8 2021 at Unit 4 led to severe damages on the generator and turbine. Fortunately, no injuries were reported among the staff. 

The plant has indeed been plagued by a series of technological issues, among others with the boilers, steam piping pressure, mill crushers, and ash system blockage. In February 2019, Eskom reported that ZAR8 billion would be needed to fix design defects at Medupi and Kusile. Repairs were made in the first half of 2020. More repairs were scheduled later on in 2020. 

Medupi has attracted widespread criticism in South Africa and has been at the centre of a local and international campaign targeting the World Bank at the beginning of 2010.

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