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October 07, 2013

World Bank-Supported Coal Plant Faces Further Delays Due to Local Opposition

SmogJust one week after a report from Oil Change International revealed how the World Bank Group's infrastructure program in Indonesia circumventing the restructions on funding for coal plants in the new energy strategy by using development policy loans and financial intermediaries to a promote government plan to build over 40 coal projects, Japan's Electric Power Development Co. (J-Power) announced new delays in securing the $4 billion it needs to construct the World Bank-supported 2,000-megawatt Central Java coal-fired power plant. The Central Java plant exemplifies almost everything that is wrong with massive coal projects, and the fact that these issues are forcing repeated delays puts new pressure on the World Bank to close the loopholes that allowed the World Bank-financed Indonesia Infrastructure Guarantee Fund to provide a $33.9 million guarantee for the project.

Aside from forcing people from their homes, massive coal-fired power plants like Central Java pose an immediate threat to nearby communities that will be forced to live with contaminated air and water. It is for this reason that more than 7,000 local residents are strongly opposed to the project, with many citing the environmental impact of the plant as their reason for refusing to sell their land. And despite the massive financial interests behind the project, activists are winning very real victories. Construction was supposed to begin in October of 2012, but with 2014 just around the corner, J-Power's inability to secure land and issues around environmental assessments have effectively stopped the project in its tracks.

Perhaps most vexing, though, is that the World Bank not only continues to support projects like Central Java over protests from impacted communities and clear impacts on public health and the environment, but they continue to claim these projects will help address the very real problem of access to electricity. But the International Energy Agency has shown that over half of energy services must be provided by clean, off-grid renewables if we are ever going to reach 100 percent energy access. Too often local communities are forced to contend with all of the devastating effects of coal-fired power plants, while transmission lines carry the energy to industries that can afford to pay more for electricity.

The Sierra Club celebrated the directive to end funding for coal plants in the World Bank's energy strategy as a testament both to President Dr. Jim Yong Kim's leadership as a public health advocate and in the fight against climate disruption, as well as President Obama's commitment enforce his Climate Action Plan, which calls for an end to financing for oversees coal with public funds. However, without strong implementation, the energy strategy and the Climate Action Plan are just words. Now is the time to close the loopholes and end support for dangerous and financially risky projects like the Central Java coal plant.

-- Nicole Ghio, Sierra Club International and Trade Representative

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