South Africa will develop a green investment plan of up to 500 million dollars (7.4 billion rand), which is a fraction of what is needed, to finance its energy transition away from coal.
The allocation of at least $ 200 million would come from the Climate Investment Fund, including a $ 1 million grant to draft the plan, Environment Minister Barbara Creecy told reporters in the capital. , Pretoria, ahead of the COP26 climate talks in Glasgow later this year. month. The initial amount of the CIF Clean Technology Fund “can leverage additional blended finance” from development banks with a three or four-to-one multiplier, she said.
The country is the world’s 8th largest emitter of greenhouse gases and offers a major opportunity to switch from burning coal to generate most of its electricity to the use of clean energy technologies.
Eskom, the world’s largest emitter of sulfur dioxide, is at the heart of the government’s investment plan which also involves a hydrogen strategy and electric vehicles. But with the state utility making losses and stuck under unsustainable debt, it also needs funding to make the transition. He described the roughly 400 billion rand needed to build production to replace coal-fired power plants as well as transmission and distribution infrastructure.
“What is on the table at the moment is small,” and additional funding, including grants, will be needed for South Africa to carry out such an endeavor, Creecy said.
Earlier this month, envoys from some of the wealthiest countries visited South Africa to discuss a possible deal to end its dependence on coal ahead of the COP26 meeting. The continent’s most industrialized nation will join others in Africa in calling for “a common definition of climate finance, accounting modalities as well as realistic, predictable and ambitious support” balanced between mitigation and adaptation, Creecy said.
The minister watered down the expectations around the summit so that it was above all an opportunity to explain the challenges facing the country. “We don’t expect anyone in Glasgow to be there with their checkbook,” she said.
Meanwhile, Creecy said it has reiterated with Eskom and petrochemical maker Sasol Ltd., the nation’s biggest polluters, that the emission limits will be enforced. “We are not going to grant exemptions.”