Government is "mindful" of concerns raised about the Chancellor House-Hitachi contract related to Eskom's loan application to the World Bank.

In a 12-page statement issued through the National Treasury on Wednesday, government responded to questions on Eskom's $3,75-billion loan application to the World Bank which - if granted - would go mainly towards the construction of the coal-fired Medupi power station.

The ruling African National Congress (ANC) owns a 25% share in Hitachi through its investment arm Chancellor House and Hitachi had been awarded the tender to build boilers for the Medupi power station.

Government said that it would continue to "engage" with all concerned parties "on this important question" with a view to having a "constructive dialogue".

"We will ensure that we have a transparent framework to deal with matters such as these," it said.

Some parties had called for the World Bank to make the loan conditional on the ANC divesting its stake in Hitachi so that the ruling party would not benefit from it.

Regarding the question of what measures South Africa would take to offset the carbon emissions from Medupi, government said the country's plan for reduction in carbon emissions was not based on an offset structure.

Rather, the plan focused on achieving country emission reductions which were consistent with the Long Term Mitigation Scenarios adopted by government in 2008.

"The initiatives by government should not be read with offsets in mind but rather be seen as country-planning that has the potential to alter the pace and path of emissions and in moving towards sustainable development, whilst ensuring stability of the region in general."

Government said tha through the Clean Technology Fund, it would look at concentrated solar power, wind energy, solar water heaters and energy efficiency.

Government also confirmed that should the World Bank grant Eskom the $3,75-billion loan, it might make an additional $1,25-billion available.

"The $1,25-billion of these additional funds would be used to support emission reduction measures," government said.

South Africa would be identifying barriers and enablers to its energy strategies and objectives as part of the Integrated Resource Plan (IRP).

"Government will take the necessary steps to address the enhancement of enablers and the removal of barriers to scale up the current set of energy efficiency and renewable energy programmes and implement future actions."

It said that the work with the World Bank in this regard had already commenced.

"The World Bank has been instrumental in providing finance for a study to ascertain which barriers exist to introduce independent power producers (IPPs), with an emphasis on renewable technologies and renewable energy feed-in tariffs (Refit)."

South Africa said that it would explore the acceleration of the decommissioning dates of older inefficient plants, if warranted, as part of the overall energy strategy and as informed by the success of energy efficiency and demand-side measures.

"This will further contribute toward reaching our emission reduction targets.

"However, a view to decommissioning is something that we can only do in the medium term given our current energy requirement and the fact that the new and more efficient technology will only come on stream in approximately five years."

Government gave the assurance that it had held extensive consultations with civil society regarding the Medupi project.

"Initially as part of the development of the environmental impact assessment for Medupi, extensive public consultation took place.

"Issues raised were captured in the record of decision (ROD) and amended ROD following appeals."

Government said that there had also been a process of engagement in the drafting of the Project Appraisal Document as required by World Bank procedures.

Subsequent discussions had mostly been with civil society organisations on an individual basis.

"The South African government has furthermore engaged with the National Economic Development and Labour Council (Nedlac), which includes representatives from labour, business and the community.

"Government has not sought to engage with certain groups, who are in principle opposed to a loan from the World Bank."

Government said that talking to civil society was seen as a process that would continue, as government sought to address and allay all concerns.