SA gets billions to shift from coal to renewables

Global fund approves aid
The funding will allow South Africa to decommission ageing coal-fired power stations, while deploying new renewable generation capacity.
    - 2022-10-31 00:00:00
Lameez Omarjee - South Africa has secured US$500 million (R9 billion) to aid its just transition from coal to renewables.
The Climate Investment Funds – a multilateral climate fund affiliated with the World Bank – had approved the funding.
Last year, South Africa, along with Indonesia and India, were invited to participate in the CIF\'s Accelerating Coal Transition (ACT) investment programme. The participating countries had to develop an investment plan.
According to a statement from the CIF, its governing board had endorsed the plans for South Africa and Indonesia – and they would each receive US$500 million in \"concessional, risk-bearing capital.\"
\"The decision intends to equip each country with access to US$500 million in concessional, risk-bearing capital from CIF’s Accelerating Coal Transition (CIF ACT) investment programme to build momentum toward ambitious climate, energy, and development goals,\" the statement read.
\"I welcome the decision by the Climate Investment Funds\' governing body to approve US$500 million in concessional resources under the ACT Investment Programme,\" forestry, fisheries and environment minister Barbara Creecy said in the statement.
INVESTMENTS
Creecy added that estimates indicate over the next eight years, South Africa needs over US$60 billion (about R1 trillion) in investments to support its transition.
\"The CIF ACT finance will make a meaningful contribution towards South Africa walking down that ambitious pathway to a brighter future of our people, addressing our energy needs, promoting sustainable development and leaving no one behind,\" said Creecy.
According to CIF the investment plan from South Africa will support the retiring of several coal-fired plants and bring online clean power and energy storage systems. Also workers and communities affected by the transition - especially women and vulnerable groups – would also be supported.
PROJECTS
South Africa\'s energy sector is the most carbon-intensive among the G20 mostly due to the dominance of coal. A major part of reducing emissions is linked to deploying more renewables.
A fact sheet distributed by CIF unpacks the projects that would be pursued and indicate that a combination of concessional loans and grants would be made available, along with credit guarantees. There is a strong focus on just transition support for workers at coal plants and communities in Mpumalanga, where South Africa\'s coal value chain is concentrated.
The finance from CIF is expected to crowd in more funding for South Africa\'s Just Energy Transition Partnership, which has its roots in the US$8.5 billion in climate finance offered by the US, UK, Germany, France and EU at COP26 last year.
Cabinet has recently approved an investment plan for the US$8.5 billion. Government is also in talks to finalise two loans - collectively about R10 billion - from Germany and France\'s development banks to support the transition. – Fin24