THE World Bank approved a controversial $3.75bn loan to build one of the world's largest coal plants in South Africa on Thursday, defying international protests and sharp criticism from the Obama administration that the project would fuel climate change.

The proposed Medupi power station, operated by South Africa's state-owned Eskom company, was fiercely opposed by an international coalition of grassroots, church and environmental activists who said it would hurt the environment and do little to help end poverty. As planned, it would put out 25m tonnes of carbon dioxide a year and would prevent South Africa making good on a promise to try to curb future emissions.

The bank said it had acted to help South Africa escape a crippling power shortage. “Without an increased energy supply, South Africans will face hardship for the poor and limited economic growth,” said Obiageli Ezekwesili, the World Bank's vice president for Africa.

But the bank's approval for the Medupi plant, though expected, was overshadowed by dissatisfaction from American and European donors, as well as a groundswell of protests.

America, Britain, the Netherlands, Italy and Norway registered their opposition to the loan by abstaining from the vote, the traditional method of dissent on the board which operates by consensus.

In a statement, the US treasury department said the loan was incompatible with the bank's stated commitment to promoting low carbon economic development.

“We expect that the World Bank will not bring forward similar coal projects from middle-income countries in the future without a plan to ensure there is no net increase in carbon emissions,” it said. Britain, registering its abstention, noted the controversy surrounding the plant.

— The Guardian, London