The World Bank is set to approve a controversial $3,75 billion loan to help South African state utility Eskom develop a mega coal-fired power plant, despite opposition by member countries including the United States and the Netherlands.

The United States and the Netherlands indicated they will oppose the loan in statements by countries submitted ahead of the World Bank board meeting. Britain, which is in the midst of an election race, is expected to do the same.

A Dutch Foreign Ministry spokesman said it had advised its representative at the World Bank to abstain from supporting the loan, citing a lack of progress on developing renewable alternatives. [nAAT010153]

The loan is expected to be approved, however, regardless of US, Dutch and possible British opposition. Board decisions are arrived at through consensus among member countries rather than through voting, and countries can indicate opposition by abstaining from discussion of the issue.

Eskom has argued it has no immediate alternative but to develop the 4800-megawatt Medupi coal-fired plant in the northern Limpopo region to ease chronic power shortages in South Africa and ensure power supplies to neighboring states that depend on it for some of their electricity.

While $3 billion of the loan will fund the bulk of the coal-fired plant, the remainder of the financing will go toward renewables and energy efficiency projects, it said.

“We believe this project is important for South Africa and South Africans and we expect it will be well received by the board,” World Bank spokesman Peter Stephens told Reuters.

The US position is based on guidance issued in December by the Obama administration following the Copenhagen climate talks, which directs US representatives at development banks to encourage “no or low carbon” options prior to a coal-based choice.

It was unclear whether Britain, which had threatened not to support the project, will back the project in the end after a recent visit to London by South African President Jacob Zuma in which he lobbied British officials to support the loan.

Since that visit, however, British Prime Minister Gordon Brown has called an election for May 6 and backing the project could be politically damaging.

The opposition to the Eskom loan has raised eyebrows among those who note that the two advanced economies are allowing development of coal powered plants in their own countries even as they raise concerns about those in poorer countries.

The South African plant is using the same “cleaner coal” technology used in the United States and other developing countries to lower carbon emissions.

Environmental and development groups stepped up pressure on the World Bank ahead of Thursday’s meeting.

In a letter endorsed by 125 organizations, the groups argued that the project will not bring electricity to the poor but will benefit large mining houses and smelters.

In a complaint submitted this week to the World Bank’s independent complaint body, the Inspection Panel, on behalf of residents living near the Medupi plant, claimed that the project violated World Bank policies and would harm their health and the environment.

“This coal loan is not about alleviating poverty or supporting sustainable development and the World Bank has no business making it,” the environmental group Friends of the Earth said in a statement on Wednesday.

In a letter to World Bank President Robert Zoellick on March 26, three senior US Democrats, including Senators John Kerry and Patrick Leahy and Representative Barney Frank, who chair congressional panels, raised concerns about the loan and the World Bank’s rationale for supporting a project that will be a major polluter.

They said while developing countries should not be constrained by a lack of access to energy, “we cannot ignore the reality that our planet is hurtling toward potentially catastrophic climate change.” In an April 5 response, Zoellick said the World Bank had worked with the South African government to significantly improve the Eskom project over the past year and include a portion of renewable energy sources.

“We have conducted due diligence on all aspects of the project and have concluded that the projects development and poverty reduction merits, along with the need to support South Africa in meeting its energy crisis, should lead us to submit the project to our board for their consideration,” he said.