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BRICS New Development Bank Corruption in South Africa
by Patrick Bond
5 September 2021

1. Introduction: Raised – and dashed – expectations for the BRICS replacing Western banking

In 2013 in Durban, at the heads-of-state summit of the Brazil-Russia-India-China-South Africa (BRICS) bloc, a New Development Bank (NDB) and Contingent Reserve Arrangement were agreed to, and they were formally initiated at the 2014 Fortaleza summit (Bond 2016a). The NDB’s mandate was “mobilising resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement the existing efforts of multilateral and regional financial institutions for global growth and development” (BRICS 2013). The West’s “Washington Consensus” ideology and neoliberal policy strategy had done enormous damage by forcing the rest of the world to liberalise finance, trade and investment, causing economic, social and ecological destruction, and strengthening multinational corporate power. In their generally overcrowded and often dangerous, polluted cities, the BRICS have formidable housing, livelihood and environmental needs; a new institutional approach to financing these, beyond standard state subsidies, was warmly welcomed. Two well-known former World Bank chief economists were involved in the initial scoping, emphasising the NDB’s potential strengths in sustainability lending, as we see below.

South Africa is an appropriate case study of whether these expectations have been realised over the subsequent seven years, during which ten NDB loans were granted in two currencies: $3.2 billion in US dollars and R17.4 billion ($1.2 billion in 2021 terms). The main national leader during this time, Jacob Zuma of the African National Congress (ANC), was one of the most vocal critics of the World Bank and International Monetary Fund (IMF). In 2016-17, on several occasions, Zuma claimed that because he brought South Africa into the BRICS, the West wanted him out of power, even murdered. [1] And at the 2015 Ufa BRICS leaders’ summit, Zuma expressed the need for an alternative to the Washington banks in a Russia Today (2015) interview: “They want to dictate what you should do. You can’t utilise that kind of assistance the way you want. So, in a sense, it has conditions that will keep you dependent all the time. That’s what we’re trying to take ourselves out of.” Zuma held power from 2009-18. His successor, Cyril Ramaphosa (2018), told the United Nations that the IMF and other multilateral institutions “need to be reshaped and enhanced so that they may more effectively meet the challenges of the contemporary world and better serve the interests of the poor and marginalised.”

Unfortunately, the subsequent lack of multilateral financial reform – in part due to the BRICS’ own assimilation strategy, and willing cooptation by World Bank and IMF leaders – became obvious soon enough. [2] Although this chapter considers the major site of lending, South Durban, as mainly a study of urban infrastructure sustainability, there are problems already evident in the NDB that reflect similar grievances against the World Bank: a systematic lack of consultation, widespread corruption, reversion to inappropriate hard-currency lending, and the projects’ overall dubious illogic (

These ten loans are, in chronological order:

  1. $180 million for Eskom renewable energy and a major township’s restructuring granted in 2016 but put stalled due to confessed corruption (Euromoney 2019) but then reactivated in 2018;
  2. $200 million for Transnet’s Durban port expansion in mid-2018;
  3. $300 million for renewable municipal electricity via the Development Bank of Southern Africa in mid-2018 (although the on-lending financier has not announced any particular use of the NDB funding);
  4. $480 million to Eskom for de-sulfurisation equipment for the ‘Medupi’ coal-fired power plant, that on the one hand ameliorates local pollution (certainly a positive, necessary component for the host town of Lephalale), but also facilitates the extension of the world’s largest coal-fired power plant currently under construction, at 4800 MegaWatts;
  5. $220 million to the TransCaledon Tunnel Authority (TCTA) to support the Lesotho Highlands Water Project’s next dam, which pumps water across a catchment to South Africa’s main cities in Gauteng Province.
  6. R1.15 billion ($82 million) to the Industrial Development Corporation for “clean” energy.
  7. R7 billion ($500 million) to the SA National Roads Agency for toll road “strengthening”.
  8. $1 billion to the national government’s initial mid-2020 bolstering of foreign reserves for Covid-19.
  9. $1 billion to the government’s 2021 foreign reserves for “public health and social security” financing associated with Covid-19.
  10. R6 billion ($430 million) for Eskom’s battery storage strategy.

Before enquiring into the main loans’ appropriateness, consider the NDB’s sustainability mandate, followed by a brief survey of the South African urban infrastructural terrain.

2. NDB mandate rhetoric, from environmental to financial sustainability

There are several general problems evident within the NDB: its tendency to corruption, lack of appropriate oversight, neoliberal export orientation, lending in inappropriate currency, and failure to consult affected communities (Bond 2019a). Before considering each of the main South African loans with sustainability criteria foremost in mind, it is useful to review the NDB’s own original mandate, which stressed the innovative financing options associated with environmental-oriented infrastructure lending.

The NDB’s roots were complicated by the role of two Western consultants, London and New York economists Nick Stern and Joe Stiglitz – both former World Bank senior vice presidents and chief economists – who in 2010 began advocacy for the BRICS Bank. Indeed in a 2011 memo commissioned by BRICS leaders, they recommended the following:

Low-carbon infrastructure and technologies, in particular, are crucial to lay different and more resilient foundations for growth in the next decades. Investments are urgently required to both mitigate the risks and adapt to climate change, generate economic growth, reduce poverty and promote stability and security. These are the great challenges of the 21st century. Failure on one is likely to imply failure on the others (Stern and Stiglitz, 2011).

Although these are noble sentiments, they have little hope of ever being realised given the broader BRICS project of high-carbon extractive infrastructure. China, the U.S. and India remain the top three greenhouse gas emitters; all continued increasing their contributions to climate change notwithstanding the increasingly obvious dangers to future generations and species. Brazil is much more rapidly exploiting the earth’s vital lung, the Amazon rainforest, for the sake of soy, cattle, timber, mining and oil interests close to the rightwing, climate-denialist president Jair Bolsonaro. Russia continues gas exploitation and transmission (increasingly to China). South Africa is engaged in massive new fracking investments, offshore oil and gas (including Total’s drilling of a billion barrel-equivalents), the export of 18 billion tonnes of new coal (mainly to India but from late 2020 to China as well), and coal-fired power generation including two 4800 MW plants now under construction and a 4600 MW plant initially promised in a Chinese metallurgical complex (though in 2021 scaled down to 1320 MW). A carbon tax of less than US$1/ton (compared to Sweden’s of $120/ton) was imposed after seven years of delay, but mainly affects poor people in the form of regressive petrol and electricity levies.

In this context of systematic unsustainability, environmental injustice and worsening inequality in the BRICS countries, it was reasonable to ask whether their leaders were really serious about challenging the Bretton Woods Institutions and other structures of global power, particularly from the standpoint of environmental stewardship. After all, if revolutionising development finance was the objective, there was an alternative already in place they could have supported: the Bank of the South. Founded by the late Venezuelan president Hugo Chavez in 2007 and supported by Argentina, Bolivia, Brazil, Ecuador, Paraguay and Uruguay, the Banco del Sur (Bank of the South) had acquired $7 billion in capital by 2013. It offered a more profound challenge to the Washington Consensus, especially after Ecuadoran radical economists led by Pedro Paez improved the design. Instead, the BRICS appear to favour the stabilisation of the world financial status quo, rather than radically changing the most unfair and intrinsically destabilising components.

Ignoring the Bank of the South was possible in part because of claims that the NDB would be dedicated to sustainability, as was often advertised. As Standard&Poors (2019) remarked in its 2019 AA+ rating, “The NDB’s mandate is to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.” Although S&P was impressed that $8 billion had been lent to various infrastructure projects – transportation (29%), energy (26%), water/sanitation/irrigation (22%), social infrastructure (15%), and cleaner production (8%) – the ratings agency noted the bias in country recipients: “India (40%) and China (25%), which we believe reflects the difficulties in finding viable bankable projects in Russia, Brazil, and South Africa.”

Not only have the latter three (BRS) suffered junk bond ratings from 2015-17, catalysed by the crash of commodity prices. In addition, all three defaulted on their foreign debt in living memory (South Africa in 1985, Brazil in 1987 and Russia in 1998). This uneven financial terrain is something that the two BRICS NDB theorists would have had in the back of their minds. Indeed, when Stern openly bragged to a 2013 London conference that he was the co-instigator of the very idea of a BRICS Bank, he did not stress the written rationale (Stern and Stiglitz 2011), i.e., to finance a “different type of economic growth.” Instead he emphasised the merits of a bank in facilitating deal-making between states and multinational corporations:

If you have a development bank that is part of a [major business] deal then it makes it more difficult for governments to be unreliable... What you had was the presence of the European Bank for Reconstruction and Development (EBRD) reducing the potential for government-induced policy risk, and the presence of the EBRD in the deal making the government of the host country more confident about accepting that investment. And that is why Meles Zenawi, Joe Stiglitz and myself, nearly three years ago now, started the idea. And are there any press here, by the way? Ok, so this bit’s off the record. We started to move the idea of a BRICS-led development bank for those two reasons. (emphasis added) (Stern 2013)

Cynical, this attempt to crowd-in corporate investment needs, under the rubric of sustainability. South Africa’s own NDB design stage was equally inconsistent when it came to environmental values. While in this chapter there is insufficient scope to explore all the NDB experiences within the BRICS countries, at least an overview of South Africa’s borrowing from the local NDB Africa Regional Centre is feasible, focusing on the Stern-Sitglitz (2011) mandate for financing “low-carbon infrastructure and technologies… [to] mitigate the risks and adapt to climate change, generate economic growth, reduce poverty and promote stability and security.” With these in mind, it is obvious that South Africa faces formidable challenges with regard to urban infrastructure sustainability.

3. South African infrastructure in context: the unsustainable Minerals-Energy Complex

South Africa’s housing, livelihoods and environmental problems are immense, and have been for decades (Bond 2002). To illustrate, more than two-thirds of society live below the poverty line of $3.50/day (considered to be the local ‘upper bound poverty line’). They suffer a backlog in formal housing of three million units (i.e., encompassing more than a fifth of the 60 million residents), and most of the new houses built over more than a quarter-century of post-apartheid democratic state power are much smaller and further away from economic activity than even apartheid-era township houses. The unemployment rate in 2021 had risen to 42 percent (including people who have formally stopped looking for jobs out of hopelessness), thus generating the world’s highest income inequality rate, with a Gini Coefficient measured at 0.78 in market terms (prior to state intervention) (World Bank 2014). Johannesburg was measured in late 2017 as the major city with the world’s highest Thiel inequality ratio (EuroObserver 2017). In late 2018, the nitrogen dioxide levels in the area just northeast of Johannesburg (the city of Emalahleni) were determined to be the highest on earth (Greenpeace 2018).

In this context, urban infrastructure should be of the highest priority for state investments, so as to improve basic supplies of housing, water, sanitation (including biogas digestion based on simple, low-flush technology), electricity (featuring decentralised renewable supply), clinics and schools, child-care facilities, tarred roads, public transport, storm water drainage, rainwater harvesting, recreational facilities and well-located settlements. Vast shortcomings in post-apartheid neoliberal urban planning have left such basic needs unmet, or met with tokenistic responses (Bond 2014).

The inevitable problem, however, is that the power relations in the society are skewed away from meeting these basic needs, and towards the satisfaction of corporate priorities. As NDB President KV Kamath explained during his 2017 launch of the bank’s Africa Regional Centre in Johannesburg,

Of particular relevance to the NDB is the National Infrastructure Development Plan which is part of the National Development Plan, which sets out a series of ambitious and far-reaching initiatives in which to start to transform South Africa’s economic landscape. We expect that initiatives that NDB supports will form a part of the Strategic Investment Projects (SIPs) identified by the government. (Kamath 2017)

If so, the danger rises that the NDB will turn away from providing finance that would solve the genuine needs of urban and rural people, and instead will finance ‘extractivist’-oriented infrastructure. The central dilemma for any infrastructure bank, is that those who have unmet basic needs require subsidisation of both capital and ongoing (“operations and maintenance”) costs. But a major new bank like the NDB does not subsidise, for it must return profits to its shareholders, especially to retain the AA+ rating won from Western credit ratings agencies (Standard&Poors 2019). On the one hand, the South African NDP’s plans certainly include progressive commitments to eradicate shortfalls of basic-needs infrastructure, and of the ten SIPs, several do have potential if they are subsidised with grants (both capital and operating). But on the other hand, as has been repeatedly shown in public policy, it is impossible for a bank to turn a profit so as to ensure that a project has financial sustainability, when funding such basic-needs infrastructure.

Moreover, there are also sustainability dangers associated with the four NDB borrowers in South Africa, and specifically with the two largest SIPs in the national infrastructure plan. The second of these, South Durban port expansion, is already in major trouble due to not only urban unsustainability but also corruption, and yet the NDB holds a 30 percent financing stake (of $200 million) in the current stage of SIP2. The first SIP is also worth at least brief consideration, since it entails both fossil-dependent energy that in late 2018 brought together the two largest parastatal firms – rail and port manager Transnet and electricity producer Eskom – in a moment of revealing chaos. And the final NDB loan of 2018 went to a local development bank with an appalling record of environmental and financial unsustainability.

To understand South Africa’s political-economic-ecological context, in which during apartheid electricity for poor people was supplied as an afterthought only after the 1980s, requires awareness of the so-called ‘Minerals-Energy Complex’ that has dominated the economy and ruling class since at least the era of Cecil John Rhodes. The richest man in Africa’s history, Rhodes came to prominence 150 years ago in the now-exhausted diamond fields of Kimberley, where he consolidated the De Beers global monopoly. In subsequent years, the Oppenheimer family’s Anglo American Corporation (founded in 1917) dominated both mining and urban development in the so-called Highveld of South Africa, including the Bushveld Igneous Complex that reaches to Zimbabwe’s border, and the coal deposits that criss-cross the eastern half of South Africa.

As for the affected cities and mining towns, they lie on an arc stretching from the Rustenberg platinum zone on the west south to Mogale City and Welkom (where gold in the vicinity is still mined), through Johannesburg and Ekurhuleni (whose gold is mostly exhausted), southwards to the Vaal metallurgical complex (home of the major steelworks) and then eastwards to Secunda (where the oil-from-coal extraction site makes it the world’s single-largest site of CO2 emissions), and then north to the Emalahleni coal centre. These cities represent exceptionally unequal sites of pollution and poverty. To be more precise, Johannesburg’s historic whites-only centre city and Parktown-Houghton suburbs 9entralized the mineral wealth during the 20th century, and after racial desegregation began, the Sandton-Bryanston-Hyde Park strip further north captured surpluses in the 21st century, as capital fled its former safety zones for gated communities.

In all these cities, the working class and poor were – and still are – kept far away from the financial-centre and headquarter activities associated with the mining industry. This pattern reflected the needs of mining houses and other industries for cheap labour supplies: workers living in the cities who were termed ‘temporary sojourners.’ They could reside in the gigantic townships nearby, only so long as they possessed a ‘dompass’ (pass book), which their employment provided (Bond 2000). After the work was finished, or if the workers became sick or injured, they were expected to return to Bantustan rural areas. The gendered power relations associated with these migrancy relations were another reason – in addition to class and racial power – that workers’ inexpensive social reproduction left companies operating in South African cities with among the world’s highest profit rates (Saul and Bond 2014). [3] The sustainability of these cities was simply not a concern.

After apartheid was dismantled in 1994, urban sustainability degenerated further. The next stage of minerals-sourced accumulation was driven not only by the world’s largest mining houses, including BHP Billiton (formerly the South African firm Gencor), Glencore (also with strong South African roots), and Anglo American (from 1999 allowed to relist its main financial headquarters in London). By the late 2010s, the largest share in the latter was no longer the Oppenheimer family’s, but instead Anil Agarwal who owns the Indian firm Vedanta (though he sold much of it during the early 2020s when he could not acquire even a board seat). The massive Iron and Steel Corporation of South Africa foundries of the Vaal – once state-owned – became part of Lakshmi Mittal’s ArcelorMittal empire. Even a Russian, Roman Abramovich, owned Emalahleni’s main steel firm, Evraz Highveld, although it was forced into bankruptcy in 2016 due to a wave of cheap Chinese imports, leaving the area’s economy in tatters (Bond 2018a). What had been anticipated across the world as the primary site of emerging market country unity, the BRICS, was now revealed not as a fraternity which would collaborate with each other against the West, but instead as an intensely-competitive and sometimes cannibalistic mode of capitalism. The cities suffered enormously (Bond and Garcia 2015).

Also after 1994, the new black South African tycoons entering mining made the cities even less sustainable. As a result of a greater commitment to extraction (particularly of coal), South Africa suffered even higher levels of particulate pollution, more venal corruption, and a more uneven urban structure, with settlements located even further away from city centres than during apartheid due to the cheaper cost of land there (Bond 2000). The ‘Black Economic Empowerment’ and crony-corporate elites included Ramaphosa (whose 2012 role in the Lonmin massacre of platinum mineworkers was the most extreme indicator of unsustainability), Patrice Motsepe, Mzi Khumalo, Khulubuse Zuma and the most notorious: the Gupta brother immigrants (Saul and Bond 2014). To illustrate, the nephew of President Jacob Zuma, Khulubuse, was the main investor in greater Johannesburg’s Aurora gold mines, whose steady bankruptcy and asset stripping suddenly amplified a pre-existing ‘Acid Mine Drainage’ pollution threat. At one point the mine ceased pumping the mine-poisoned water out, thus threatening the region’s water table (Bond 2018b).

Perhaps worst of all, the Gupta brothers spent the 2009-18 period bribing and corrupting the ruling party, but in terms of urban sustainability they were also a formidable negative influence. In 2015-18 their main mining house Oakbay controlled a massive coal mine (Optimum) that soon went bankrupt. This not only threw the country’s electricity supply into question, but compelled Eskom to run much more expensive diesel turbines to supply power. That, in turn, raised tariff costs paid by the urban poor to unaffordable levels. In the decade 2008-17, the real price of Eskom electricity rose by nearly 300 percent. Urban poor residents turned from turning on an electricity switch, to firing up paraffin, coal and wood energy sources, with corresponding increases in disease (with intra-household gendered and generational implications) (Bond 2016b).

Central to the unsustainable carbon intensity of the South African economy, and facilitating this untenable urbanisation pattern, are the parastatal firms Eskom and Transnet. The former’s inability to reduce its reliance upon coal-fired power plants and to replace generation capacity with renewable sources, and likewise the intensity of Transnet’s reliance upon coal exports (and lack of concern for a balanced rail transport network), are together reflected in the two largest mega-project investments in the 2012-30 National Development Plan (Bond 2017).

In the first SIP, the state – led by Transnet and major mining houses – made a $60 billion commitment to the export of 18 billion tons of coal (mostly to India) along new rail lines, using imported locomotives (from China, also financed from China) that can carry 3 kilometer-long ore-carrying trains. At $60 billion in cost, this is by far the largest single project within the 2011 National Infrastructure Development Plan (the one enthusiastically endorsed by Kamath in 2017). Eskom relies on coal from the same areas (Limpopo and Mpumalanga provinces) for 90 percent of its generation capacity. That structural relationship sets Eskom against Transnet and the coal exporters it serves. Competition suddenly emerged over the geographic combustion of the coal, in the competition for domestic (Eskom) or export (Transnet) sales. In 2018, that competition became the source of great national concern due to periodic ‘load-shedding’ blackouts in part caused by very low coal supplies at most of Eskom’s 15 power plants. [4]

Another factor was the crash in the price of coal from a high of $170/ton in 2008 to $48/ton in 2015, before recovering to above $90/ton throughout 2018. The 2020 crash caused by Covid-19 lowered the price to $55/ton, but it soared to $110/ton by mid-2021. Coal price turbulence was one indicator of extremely volatile commodity markets, and although movements in the value of the South African currency compensated, such wild fluctuations mitigated against planning and investment. Also volatile is the extent to which the average South African emits CO2 as a result, mainly, of Eskom’s coal consumption, used to generate 90 percent of the country’s electricity. Compared to a world average of below 5 tons of CO2 emissions per person each year, the South African rate has zigzagged between 7.5 and 10 (Bond 2016b). But of crucial importance is the skewed consumption, since smelting and mining are vastly over-represented in the South African emissions footprint, and very few poor and working-class people directly benefit (e.g. as workers) from the country’s Minerals-Energy Complex. The net negative impact of South African extraction of coal and minerals has been measured by the World Bank (2010) at -9 percent of national income, a figure arrived at through ‘natural capital accounting,’ by recognising the depletion of society’s natural resource wealth by (mostly) multinational mining corporations, whose reinvestment in physical, human and natural capital is net negative (Bond 2018). All of these represent systematic unsustainability in ecological, financial and also political respects.

The second largest SIP mega-project is the $20 billion expansion of the port-petrochemical complex in Durban, again led by Transnet, as discussed below. It is therefore no surprise that the first two BRICS NDB loans to South Africa also reflect these biases. The 2016 and 2018 credits of $180 million to Eskom and $200 million to Transnet quickly fell into controversy, and in both cases, the projects went into immediate hibernation in part due to the borrowers’ systemic corruption, and in part to the failure of both to properly make their projects sustainable (Bond 2020a).

4. The NDB loans to Eskom: 2016, 2018, 2019

In 2016, the NDB signed up its first South African borrower: the parastatal energy firm Eskom, led by a man who would become notorious due to his links to the Gupta brothers, Brian Molefe. In line with NDB financing in its early stages, the first $180 million in funding was allocated for the transmission of electricity to the grid from several dozen privatised solar and wind “Independent Power Producers” (IPPs), as well as for restructuring Soweto’s electricity supply. In generating solar and wind power, the IPPs’ privatisation costs are substantially more than they would be if Eskom had developed its own renewables capacity. The IPPs also require repayment of profits in hard currencies to mainly European producers. Due to these additional costs, such a system has long been opposed by South African progressives who insist on state-supported renewable energy that is worker self-managed, community-controlled and socially-oriented. A major protest by trade unions from affected sectors was held against Ramaphosa at his Pretoria office in November 2018. Moreover, Soweto residents have an 85 percent illegal reconnection rate, with more than $1 billion in overdue Eskom accounts, so the NDB’s failure to consult with activists ensures continual conflict (Bond 2019a).

Yet at the time, in 2016-18, neither of the former Eskom leaders who negotiated the loans – Molefe and his successor Matshela Koko (who were both in 2019 subject to prosecution for multiple forms of corruption) – desired renewable energy. They both favoured nuclear instead. [5] “Energy experts in South Africa believe the NDB is not happy with Eskom because it has earmarked a large chunk of the $180 million loan for projects not related to renewable energy,” according to Peter Fabricius (2017). “The highly controversial Molefe’s indifference to renewable energy suggested to many that he had already signed up to Zuma’s dubious nuclear project” – whose cost was estimated at $100 billion – leaving “great suspicion that Zuma has already promised the construction contract to Russian President Vladimir Putin.” That deal was consummated in mid-2015 at the BRICS summit in Ufa, but reversed in 2017 in the courts when environmentalists challenged the public participation processes.

However, the day before the opening of the Johannesburg NDB branch in 2017, NDB chief executive Kamath revealed that his loan to Eskom was actually “in abeyance” at Pretoria’s request (Cohen 2017). The statement was contradicted by South Africa’s NDB vice president, Lesley Maasdorp, when Euromoney (2019) interviewed him in 2019. He conceded that Eskom loan was “saddled with corruption allegations and governance challenges. So that loan was put on ice and never formally concluded.” In fact, it was concluded in mid-2018, with a revival of the loan.

The impression left was that the NDB’s role in Eskom is highly inconsistent, and that it has no particular influence over the sustainability of electricity supply required to meet the needs of urban residents. Activists in Soweto, in particular, were militant and well organised (including during the late 1980s by Ramaphosa himself, a native of the township). Their struggle for Free Basic Electricity, launched by the Soweto Electricity Crisis Committee (SECC) in 2010, was successful within months, for the ANC promised a lifeline supply that Eskom ultimately lowered to 50 kWh per household per month. SECC activists continued to campaign vociferously for double that amount, and for an end to the hated pre-payment meters which represented a self-disconnection system. They pioneered electricity ‘commoning’ strategies to continue their access to power in spite of Eskom disconnections, and they rejected the ‘green box’.

In 2016, the NDB signed up its first South African borrower: the corruption-riddled parastatal energy firm Eskom, led by Molefe (who in 2017 was forced to resign in disgrace). In line with NDB financing in its early stages, the first tranche of funding was allocated for renewable energy transmission connections to privatised solar and wind projects, to be followed by the restructuring of Soweto’s electricity supply. With respect to the latter, Soweto residents have an 85 percent illegal reconnection rate, with more than $1 billion in outstanding in overdue Eskom accounts (around an 85% non-payment rate), and hence consultation with leading residents’ organisations such as the Soweto Electricity Crisis Committee (Ngwane 2003) would be an absolutely critical component of any sound lending strategy. Such consultation was done neither by Eskom nor the NDB. The main grievances associated with non-payment are excessively high prices (and their 300 percent real increase from 2008-17), an ungenerously low lifeline supply, intermittent supply, the pre-payment meter system (generally not applicable in rich areas), Eskom’s punitive disconnection policy, and systematically inaccurate billing.

The bulk of the US dollar-denominated loan was meant for the transmission of 670MW of solar and wind power, to contribute around 2% more to the national grid (given that money is fungible, it was just as likely that the coal-fired power plant enhancements would benefit from the credit line, as Molefe later was accused of by NDB officials according to Fabricius 2017). But if one neglects to factor in the full cost of generating electricity, including non-renewable resource depletion, pollution and climate change (as does Eskom), the Independent Power Producers’ costs are substantially more (often double existing per unit costs). Hence Eskom leadership continually complained that each unit of renewable electricity purchased represented a net loss to their firm. [6] The loan costs are typically much higher if contracted in US dollars – especially if there is a low import content for the project – given that the rand is an extremely volatile currency. In addition, the privatised suppliers are multinational corporations which require repayment of profits to mainly European headquarters.

Finally, due to job losses in the coal sector (as renewable energy replaces coal-fired generators), without any retraining or redeployment within Eskom, South Africa’s privatised renewable system has long been opposed by progressives who insist on state-supported renewables and a ‘Just Transition’ approach to job security. A major protest against privatised renewable energy by trade unions from affected sectors was held against Ramaphosa at his Pretoria office in November 2018.

These factors all complicate what should have been an obvious trajectory by Eskom to exit coal and adopt renewable energy many years ago. Yet at the time the NDB began lending, in 2016, it should have been clear to NDB officials that neither of the former Eskom leaders who negotiated the loans – Brian Molefe and Matshela Koko – desired renewable energy, with both favouring nuclear instead. [7]

Finally in mid-2018, the Eskom renewable energy loan was revitalised, at a time of an overall electricity surplus, but an increasingly shaky coal-based power supply. By December 2018, there were regular load-shedding black-out periods as a result of unreliable coal supplies to Eskom’s coal-fired power plants, responsible for generating more than 90% of South Africa’s power. Insufficient renewable energy had been built, which in turn reflected the neoliberal bias within Eskom, to not build any photovoltaic solar capacity on its own but instead outsource it to private firms.

But a more profound reason for Eskom’s reluctance was what at the time, appeared to be looming overcapacity, what with Medupi’s and Kusile’s generators coming on line. The last prior systemic load-shedding had occurred in mid-2015, just before the commodity price crash suddenly lowered demand for electricity from both mining and smelting operations, thus cutting consumption by more than 5% nationally and allowing Eskom a much higher reserve. At this point, lending strategies were being established at the NDB, and Eskom appeared a good borrowing prospect. The NDB’s (2016b) loan rationale therefore included this concocted analysis, announced in April 2016:

Securing energy supply and developing renewable energy are therefore the government’s main policy concerns. Coupled with electricity shortage, grid facilities are getting outdated. In Soweto, a township in South Africa, electricity constraint is severe, with aging electricity infrastructure reaching the end of its usage life. Any outage of one circuit can put down the entire electricity network.

There was really no basis for anticipating that relaxing the electricity supply constraint would add 2% to GDP, because the commodity price crash of 2015 – the main reason for electricity oversupply (given curtailment of the mining-smelting sector’s immense energy demand) and low GDP growth that year – had already bottomed out by early 2016. The electricity infrastructure in Soweto was not in need of enhancement due primarily to age, but due to the anger of residents against Eskom, since the illegal reconnections degraded the quality of circuit breakers and wiring.

As for the $480 million NDB loan granted in April 2019, in addition to facilitating coal-fired power at Medupi, the credit essentially also endorses Eskom’s single largest contract, for boiler installation undertaken by the Japanese firm Hitachi (it is the boiler’s SO2 pollution that the de-sulferisation is required to mitigate). Yet in September 2015, that firm paid the U.S. government (not South Africa) a $19 million fine for Foreign Corrupt Practices Act violations, specifically bribery of the ruling ANC when Hitachi gifted the party’s investment arm a quarter stake in its local subsidiary (Bond 2020a).

The most recent NDB loan to Eskom, in late 2019, was for R6 billion (more than $400 million) worth of battery-based storage systems to enhance a small but growing renewable energy sector, appears to rely on lithium or lead components. Other energy storage systems have been used by Eskom – including a partially-working pumped hydro storage pilot project (Ingula) and a molten salt storage system serving a Northern Cape solar chimney – that are less invasive and dangerous. The NDB’s project proposal lists potential problems: “leakage of battery electrolyte and soil contamination, potential pollution from waste battery disposal, loss of habitats and potential impacts to protected species at some sites.” Assuming lithium or lead are used (instead of pumped storage and molten salt), there are much greater displacement and disposal dangers. Also, there is again a currency mismatch, for the import cost of lithium and lead are likely to be denominated in dollars, but the loan is granted in local currency.

The NDB-Eskom relationship’s various flaws can be identified not only in the bank’s obvious lack of due diligence (as Maasdorp admitted), in the climate-insensitive policies of a (corrupt) Eskom management which until mid-2018 was opposed to using renewable energy, and in the inability to assess how costs could be better matched with revenues, including dollar versus rand currency liabilities. There was, in addition, very little concern for urban sustainability, whether in addressing Soweto customers’ willingness and ability to pay for over-priced electricity, or in relation to threats from climate change more generally, given the expansion of Medupi. Similar problems are evident in the NDB’s next 2018 loan, to Transnet, for the Durban port’s expansion.

5. The NDB loan to Transnet, 2018

The next loan was in mid-2018, to Transnet, in order to expand the Durban container port. In the same style as Washington bankers, there was no consultation with affected people, especially the South Durban Community Environmental Alliance (SDCEA). Since 1995, SDCEA’s members from all races and classes have opposed the ultra-polluting port-petrochemical complex. Container trucks are especially damaging, with one careening off Durban’s notorious Field’s Hill M13 highway in 2012, killing two dozen black, working-class passengers of minibuses – just one of an annual average 7000 truck crashes in Durban. SDCEA is opposed to the massive truck logistics park proposed for the Clairwood Racecourse due to its threat to nearby schoolchildren’s safety. Although concessions were belatedly won from Engen, British Petroleum and Shell on long-overdue sulphur scrubbing at the continent’s largest refinery complex, it was not long ago that Merebank’s Settlers Primary School had a 52 percent rate of asthma, the highest ever recorded at any school. Leukaemia is still a South Durban pandemic, with rates 24 times the national average (Bond and Desai, 2022).

One major objection to Transnet’s expansion is that it first built a $1.8 billion pipeline that entails doubling both refining and Durban-Johannesburg oil transport capacity. In addition, four multinational corporations – Italy’s ENI, Norway’s Statoil, United States of America’s ExxonMobil and South Africa’s Sasol – are doing exploratory oil and gas drilling four kilometres deep in the dangerous Agulhas Current offshore Durban. This expansion is occurring not only when SDCEA demands a local transition away from fossil fuels, but so does the world due to the looming catastrophe of climate change. Evidence is growing ever more obvious, especially in damage to Transnet’s own Durban facilities during the October 2017 super-storm: a ship lost its moorings and blocked the harbour, and overboard containers let lose 49 tonnes of plastic nurdles, which continue to destroy marine life (Bond and Desai 2020).

Transnet’s ability to expand its port-petrochemical operations in a sound manner remains in question. The new oil pipeline was originally budgeted at just $450 million but its final cost exceeded $2 billion. One reason for the vast cost over-runs was incompetence and “systematic failings” in mega-project design, as even State Enterprises Minister Malusi Gigaba (2012) confessed:

Transnet Capital Projects lacked sufficient capacity and depth of experience for the client overview of a megaproject of this complexity. There was an inadequate analysis of risks… Transnet’s obligations on the project such as securing authorisations – Environmental Impact Assessments, land acquisition for right of way, water and wetland permits – were not pursued with sufficient foresight and vigour.

Another reason for massive cost over-runs was the line’s rerouting from the white areas of Hillcrest and Kloof to South Durban’s black neighbourhoods. Moreover, the University of KwaZulu-Natal Centre for Civil Society and Birdlife South Africa also challenged Transnet’s Environmental Impact Assessments for port expansion in 2012-14 due to historic climate denialism and the harbour’s ecological degradation, forcing further delays until Transnet reworked its proposal – but still not to the critics’ satisfaction. The likely collapse of the large sandbar near the container terminal will demolish vital bird and marine breeding grounds (Bond 2017).

Livelihoods in South Durban are also at stake due to the continual replacement of workers with machines. The economic justifications for the capital-intensive character of the port expansion are dubious, especially because of “4th Industrial Revolution” robotics: the new mega-ships that carry upwards of 10,000 containers now have fewer than 20 crew. Durban is already one of the world’s most expensive ports for container handling, even before a new foreign loan for overpriced infrastructure is factored in. Transnet and the NDB also failed to consider rising world economic volatility, such as U.S. protectionism which adversely affected South African steel, aluminium and car exports during the late 2010s, and the general downturn in world trade (measured as a share of gross domestic product to GDP since the 2007 peak, as noted above). Total South African imports had risen from 18 percent of GDP in 1994 to 37 percent of GDP in 2009, but then fell to 29 percent in 2019 even before Covid-19 disrupted trade further. (Durban’s harbour mainly handles container-based imports, while bulk minerals are exported through other ports.) This is a problem shared by all the BRICS aside from Brazil, measured as imports as a share of GDP in 2019: Russia fell from 68 percent in 2000 to 45 percent; India from 31 percent in 2011 to 23 percent; and China from 28 percent in 2004 to 17 percent (Bond and Desai 2022).

Ultimately, though, the most immediately self-destructive feature of the BRICS Bank loan was Transnet’s choice of the contractor to do the port-deepening work: an Italian-led consortium, CMI Emtateni, which included the best-known abuser of Durban’s patrimonial procurement system, Shauwn Mpisane. Her company was regularly embroiled in corruption controversies (Bond and Desai 2022), and the CMI Emtateni contract was specifically cancelled due to a whistleblower’s November 2018 report on “fraud, Black Economic Empowerment fronting and collusion between the Transnet employees and suppliers,” leading to the contract’s cancellation in mid-2019 (African News Agency 2019).

6. The NDB loan to the Development Bank of Southern Africa, 2018

The third loan the NDB made, also in mid-2018, was to the Development Bank of Southern Africa (DBSA), for projects to be delivered from 2018-33. According to the NDB (2018), “The objective of the Project is to facilitate investments in renewable energy that will contribute to power generation mix and reduction in CO2 emissions in South Africa,” but there are no specific investments mentioned: “The proposed NDB loan will be in the form of a two-step loan of up to $300 million to DBSA, which in turn will be on-lent to its identified subprojects, including the wind, solar, and biomass energy sectors.” [8]

The most worrisome aspect of this vague ambition relates to the parameters for greenhouse gas reductions, which include attempts at carbon offsets and trading that were initially (prior to 2012) channelled through the Clean Development Mechanism (CDM) in South Africa. The Bisasar Road landfill’s methane-to-electricity gas incineration was the first Durban pilot project, and cost $15 million in capital. However, it encountered not only intense community opposition (Bond 2012), but mainly unsuccessful results in 2007-16 in spite of promotion by the United Nations Framework Convention on Climate Change (UNFCCC), which held its 2011 annual meeting in Durban. The DBSA firmly supported the strategy of carbon trading (Tyani 2010), and a DBSA training in CDM strategies in 2002 was one of the motivations for Durban municipality to attempt the investment. But by 2014, the South African Local Government Association (2014, 4) monitoring of the project found:

The cost of verification is significantly more than the financial benefit of the credits. This process of registering the CDM project with the UNFCCC Executive Board was felt to be long, tedious and costly – emissions reduction monitoring is onerous and gas emissions data needs to be collected every few seconds using rigorous monitoring methods and expensive software packages… Incorrect equipment, not suitable for Durban’s climate, caused the system to overheat continuously and rectifying the problem caused the project costs to increase substantially.

Another factor in the NDB’s on-lending to the DBSA is that due to financial ‘fungibility’ (the ability to take one pot of money allocate to one project and move it around within an institution), the rest of the institution also deserves scrutiny. For example, a major campaign was waged by the climate activist network against the DBSA on grounds that it was part of a consortium financing a 1000 MW coal-fired power plant (Thabametsi). So funding one part of the DBSA frees up finances for the institution to continue its coal addiction. Although the DBSA’s chief executive Patrick Dlamini and then board chair Mark Swilling denied support for coal power (partly on economic grounds due to the “stranded asset” problem), the Minister of Mining and Energy Gwede Mantashe continued to endorse not only coal but also nuclear, and put pressure on its main state bank to finance a new generation of mega-projects. Mantashe was implicated in the state capture process, as his house was provided with free security by the notorious firm Bosasa (second most prolific briber of state officials after the Gupta brothers). The subsequent DBSA chair, Enoch Godongwana, was a dogmatic supporter of coal financing, threatening to impose prescribed asset requirements on commercial banks to do so (when they were announcing coal boycotts), shortly before his appointment to the DBSA in mid-2019 (Sguazzin 2019). Furthermore, corruption allegations of insider loans never repaid in full (dating to the late 2010s) led to a 2021 parliamentary inquiry about the DBSA after former board members engaged in whistleblowing, which the finance minister and DBSA officials claimed were sour-grape, illegitimate complaints (Gilili 2021).

7. The NDB loan for the Lesotho Highlands Water Project

A second NDB loan announced in April 2019 (in addition to Medupi) was for the Lesotho Highlands Water Project (LHWP), specifically to fund part of another mega-dam in what is Phase 2 of Africa’s largest water-transfer scheme. The project is ecologically damaging and unsustainable insofar as it reroutes the upper stretches of the Orange River into the Vaal River, serving Gauteng’s needs instead of the logic of the natural environment. South African water consumers are the main beneficiaries, but the pricing associated with the dam water is biased towards excessive payments by lower-income Johannesburg residents, whereas the main consumers – Eskom for cooling coal-fired power, golf courses, hedonistic households with swimming pools – pay a relatively small amount. As a result, the impact of Phase 1 on Johannesburg pricing contributed to the city’s dramatic water wars during the early 2000s (Bond 2002, Bond and Ndlovu 2010).

For more than two decades, the best-known individual associated with the LHWP has been a Lesotho national, Masupha Sole, who was convicted of fraud in association with major construction companies who transferred bribes to his Swiss account: ABB, Impregilo, Sogreah, Lahmeyer International, Hochtief, Bouygues, Keir International, Stirling International, Concor, Group Five, Balfour Beatty, Spie Batignolles, LTA, ED Zublin, Acres, Spie Batignolles, Dumez, ED Zublin and others (Bond 2002). This was the first corruption case that the World Bank took seriously, ultimately ‘debarring’ (banning) the Canadian firm Acres from future contracts, which led to its bankruptcy. After serving nine years in jail for taking the firms’ bribes, in 2011 Sole was controversially reappointed as Lesotho’s lead advisor to the project.

8. The NDB loan to the South Africa National Roads Agency

In September 2019, another loan was granted by the NDB, this one in local currency for R7 billion (the equivalent of $500 million) to the SA National Roads Agency (SANRAL). It had similar implications for the Gauteng area’s maldevelopment as the Lesotho dams, insofar as it encouraged inappropriate, unsustainable infrastructure provided by an agency with a major corruption problem. The commodification of highways in the main industrial and political centre – Johannesburg and Pretoria – had already led to citizens’ revolts over high electronic toll payments, charged for driving on the main routes in and around the two important cities.

Not only did the largest trade union federation protest these e-tolls through the 2010s alongside a middle-class civil society advocacy group (Organisation Undoing Tax Abuse). General calls to boycott e-toll payment were successful: fewer than a quarter of road users – mostly in government and rental car fleets –were paying the toll fees by 2019 when the NDB granted the SANRAL loan, a fact missing from the NDB loan project description. The losses on the Gauteng toll roads were mainly paid from other SANRAL toll fees and state grants (in Euros) to an Austrian firm, Kapsch TrafficCom, with a long-term guaranteed contract for monitoring license plates with sophisticated cameras and sending out bills.

The premise behind SANRAL’s tolling of roads was generally of great controversy because it represented a tariff paid disproportionately by working-class people faced with the long distances that apartheid imposed via the migrant labour system, in contrast to the SANRAL objective, as stated in the NDB loan project document, “to reduce transportation costs” (not specifying for which class of users). The NDB finance was specifically for “rehabilitation of the pavement for the existing toll sections of national roads, construction of additional lanes to widen such roads, and rehabilitation of related infrastructure such as bridges and intersections,” hence not providing new roads.

Like other parastatal agencies, SANRAL had long been accused of corruption, driving up the cost of the Gauteng and other roll roads to levels unprecedented in the world (according to OUTA). In one notorious case in 2015, SANRAL officials forged affidavits of Eastern Cape community residents so as to promote a toll road specifically meant for new mining (by an Australian firm) along the Wild Coast, according to world-famous activist Nonhle Mbuthuma (2016): “Save perhaps for certain mining companies, SANRAL must be the most ruthless and dishonest company in South Africa. SANRAL managers and consultants are lying… [and] had to withdraw four forged affidavits from court when fighting against the Amadiba coastal community.”

9. The NDB Covid-19 loans, 2020-21

By far the largest NDB lending to South Africa was in 2020-21, in the form of two $1 billion (hard-currency) Covid-19 emergency loans to the national government. These were rife with corruption, as the Special Investigating Unit announced in mid-2021 that of $9.0 billion spent on Covid-19 emergency relief (not associated with social grant spending), irregular contracts under investigation amounted to $1.0 billion. Even Health Minister Zweli Mkhize was forced to resign in mid-2021 because of humiliating cronyism and nepotism revealed in his $10 million Covid-19 communications budget, and Ramaphosa’s presidential spokesperson Khusela Diko was also suspended in 2020 due to her husband’s allegedly fraudulent Personal Protective Equipment tender.­­­­

But aside from corruption, there was a direct positive impact of these two loans which must be acknowledged: several months’ subsidisation of living costs for both urban and rural poor people who, as the largest component of the 2020 fiscal stimulus, received a monthly state grant. For those receiving child support (a top-up of mainly $30/month was given to 11 million heads of household) or elder care, this was of help to low monthly budgets but was terminated too quickly. There was an additional R350 ($25) monthly emergency relief grant for those who were suddenly left unemployed by the Covid-19 economic lockdown in mid-2020.

In comparison, however, to the fiscal stimulus advertised by Ramaphosa, and provided by governments in comparative situations, these grants continued to be tokenistically small. The monthly emergency unemployment grant of $0.83/day was far below the $3.50/day poverty line. It was also desperately inadequate as a macroeconomic stimulant, given the 7 percent fall in GDP in 2020. There were also other logical means of financing these local-currency grants, instead of a foreign loan: taxation of corporations and the rich; Quantitative Easing to ensure state fiscal support was available; lowered interest rates achieved through tightening exchange controls for ready borrowing; and a crackdown on procurement fraud and Illicit Financial Flows, all capable of raising not $2 billion (the NDB loans), but a conservatively-estimated $40 billion per year.

Indeed, with South Africa’s foreign debt/GDP ratio already above 50 percent, whether a foreign currency-denominated loan was needed was an important question. To be sure, the South African currency did strengthen after mid-2020 (hence the critique of higher effective real interest rates would not immediately apply), but there was a dramatic decline in imports as South African commodity exports boomed, which relaxed the current account constraint (it was South Africa’s first positive balance in 18 years). Very little of the loan inputs described in the NDB project document were required as imports; most (aside from some PPE) were (or could have been) produced locally by the remnants of South Africa’s clothing industry.

And hence this again raises a concern – one Maasdorp (2020) himself agreed was valid – about inappropriate currency alignment:

Given the Covid-19 crisis in the world we’re in today, it reinforces the need to ensure that there’s debt sustainability when a country – or a state-owned enterprise – has debt in a hard currency like US dollars or Euros. As their currency depreciates their cost increases. In other words, their overall indebtedness increases as they have to pay back more in their local currency and also as you know, many infrastructure loans, the actual infrastructure, the revenues are generated typically in local currency so you always have this foreign exchange mismatch which borrower countries have grappled with over the years.

This warning was particularly apposite not in relation to infrastructure (which sometimes does have a large import content), but to something as simple as budgetary support for the South African Treasury, which had no need for more foreign-exchange borrowing in 2020-21, even its own officials agreed (Bond 2020b).

10. Conclusion

The pages above appeal to the reader to pay more detailed attention to details – especially with respect to sustainability whether environmental, financial, political or social – than has been achieved by most oversight of the NDB and its partners to date. NGOs, journalists and even sophisticated academics often take the NDB’s green intentionality for granted, in a context where good governance normally means, simply, less corruption. This is understandable, perhaps, because in the immediate vicinity of the NDB’s Africa Regional Centre in Sandton, the headquarter offices of South African corporations invariably rank as the world leaders in bribery, corruption and various other forms of fraud measured by PricewaterhouseCoopers biannually (PwC 2018). With the initial NDB president KV Kamath and the second NDB chair, Paulo Guedes, both accused of pre-NDB financial malpractice (in bank lending and pension fund management, respectively), the question of corruption was an ever-present concern, especially given the lax approach taken by the NDB Compliance Officer.

Setting those limited understandings of governance aside, there is also a need to pay more attention to a wide range of urban infrastructure sustainability problems. The BRICS NDB in South Africa has, in just its first few loans, provided many indicators of danger signs.

One glaring problem is that policy and project decisions were taken from above, without community consultation much less ownership. In the case of the Stern-Stiglitz intervention, the rationale for the NDB’s role was very different than the sustainability reasons stated. The NDB’s renewable energy and climate rhetoric appears designed to beguile, what with the Transnet port-petrochemical complex looming as a major investment, once the corruption-idled project resumes. As in the case of Eskom’s renewable electricity, the privatised supply of services is common, in spite of the fact that the broader socio-ecological public goods that such infrastructure should contribute to are not within the ambit of a private firm’s profitability (and often stand against such self-interest).

In short, based on South Africa’s urban infrastructure financing to date, the NDB does not yet appear as an alternative to a system of Washington-centric development finance that is rife with problems. Instead, it appear from the South African case that the ingredients exist for the NDB to amplify uneven development through financing some of the country’s most notoriously corrupt institutions, for projects which are themselves highly dubious.

As a result of adverse power relations implied by these projects, the hope for insider processes of engagement and persuasion – including a BRICS NGO Working Group and ‘Civil BRICS’ networks which met with NDB officials, and more than a dozen letters to the NDB Compliance Officer (Srinivas Yanamandra) from SDCEA and allied scholars – had no impact. The delegitimisation of the NDB would become a ‘brics from below’ strategy, instead (van der Merwe, Bond and Dodd 2019). For example, the NDB’s Africa Regional Centre was the target of a protest of more than 100 activists led by four African Goldman (environmental justice) Prize winners’ organisations in July 2018, namely Earthlife Africa, groundWork, Oil Change International and the South Durban Community Environmental Alliance (SDCEA), just at the start of the BRICS summit (Moosa 2018). Again in April 2019, a picket line was held at the NDB’s Cape Town Annual General Meeting, also arranged by EarthlifeAfrica and SDCEA.

These were the first of what will be many more protests against the NDB, it is safe to say, unless it shifts away from the projects and policies that are doing so much harm to people and planet.


Footnotes :

[1In 2016, Zuma told ANC activists about the BRICS: “It is a small group but very powerful. [The West] did not like BRICS. China is going to be number one economy leader… [Western countries] want to dismantle this BRICS. We have had seven votes of no confidence in South Africa. In Brazil, the president was removed” (Zuma 2016). Zuma reiterated the point at his party’s mid-2017 policy conference: “the ANC is part of the global anti-imperialist movement. We are historically connected with the countries of the South and therefore South-South cooperation such as BRICS is primary for our movement.” A few weeks later, he announced to followers, “I was poisoned and almost died just because South Africa joined BRICS under my leadership” (Matiwane 2017). His poisoning was actually carried out by his fourth wife, whom his confidant Gayton Mckenzie (2017) argued was done in league with the U.S. Central Intelligence Agency, to halt the progress of the BRICS. However, no one has produced any proof.

[2In 2016, the NDB (2016a) leadership adopted a five-year strategy document which includes a commitment “to undertake joint projects and knowledge exchanges with the World Bank… to make the most of their decades of experience.” Similar memos of understanding exist with other multilateral institutions, including the IMF.

[3In December 2018, sabotage of the export rail line by unknown persons compelled a redirection of coal to Eskom. Expanding high-volume coal transport by upgrading Transnet’s rail lines and adding more than 1000 new locomotives capable of carrying three kilometer-long sets of wagons, was meant to benefit not only exporters to Richards Bay, but also Eskom’s two massive new coal-fired plants, Medupi and Kusile (to the extent rail lines are built from new Limpopo Waterberg mines to the generators). However, the failure to build the “forty new coal mines” promised by Eskom officials when borrowing from the World Bank in 2010, means the Waterberg has not yet been developed.

[4In December 2018, sabotage of the export rail line by unknown persons compelled a redirection of coal to Eskom. Expanding high-volume coal transport by upgrading Transnet’s rail lines and adding more than 1000 new locomotives capable of carrying three kilometer-long sets of wagons, was meant to benefit not only exporters to Richards Bay, but also Eskom’s two massive new coal-fired plants, Medupi and Kusile (to the extent rail lines are built from new Limpopo Waterberg mines to the generators). However, the failure to build the “forty new coal mines” promised by Eskom officials when borrowing from the World Bank in 2010, means the Waterberg has not yet been developed.

[5In spite of the BRICS NDB loan in 2016, Molefe announced in 2017 that he would no longer buy renewable electricity, as for long-term baseload supply especially to serve mining houses and smelters, Eskom would focus instead on nuclear. In mid-2015, NDB director (and later finance minister) Tito Mboweni had told Bloomberg news that the proposed $100 billion South African nuclear deal with Russia, “falls squarely within the mandate of the NDB.” This was in spite of enormous local controversy surrounding Zuma’s corruption-prone deal-making regarding not only Putin but the Gupta family, whose firm Oakbay would have been the main uranium supplier.

[6At no time did either Eskom or the NDB attempt a full-cost analysis of the coal-fired electricity that would be displaced by the renewable energy coming on line, including the natural capital accounts that would incorporate Eskom’s use of non-renewable resources (Bond 2018).

[7Molefe announced he would no longer buy renewable electricity, as for long-term baseload supply especially to serve mining houses and smelters, Eskom would focus instead on nuclear. While this was later reversed and Eskom has taken on larger inputs from solar and wind sources, the 2015-20 period witnessed no new renewables initiatives either public or private.

[8A flimsy NDB (2018) public statement reports, “The Project will bring significant developmental impacts through the subprojects, particularly related to environmental and social benefits from reduction in carbon dioxide emissions, increase in generation capacity from renewable energy sources, and increase in the efficiency of the overall energy sector in South Africa. The Project is also expected to have impacts of unlocking private sector investment, and increasing availability of long-term funds for projects in the energy sector in South Africa.”

Patrick Bond

is professor at the University of Johannesburg Department of Sociology, and co-editor of BRICS and Resistance in Africa (published by Zed Books, 2019).