South Africa’s $8.5 billion move away from coal comes with a big catch
President Cyril Ramaphosa’s pledge to lessen the country’s dependency on coal energy has been green-lit, but the money promised by foreign jurisdictions is coming with more terms and conditions than expected.
Speaking to Bloomberg, minister of environment, forestry and fisheries, Barbara Creecy said that the government underestimated how complicated the offer was when it was made.
She said that there are several partners and development institutions involved, and they have their own terms and conditions based on their individual fiscal cycles.
Earlier this year (6 July), Ramaphosa announced the Just Transition Framework under the Presidential Climate Commission that aims to set out policy measures and undertakings by different social partners to minimise the social and economic impacts of a long-term move away from coal.
The president of environmental summit COP26, Alok Sharma, said that the agreement between South Africa and regions such as the US, UK and the EU to unlock $8.5 billion of investment for South Africa is aimed specifically to assist in the transitioning away from coal.
According to a study conducted by COP26, South Africa is the world’s 13th biggest source of greenhouse gases and will need to spend over $250 billion over the next 30 years to fund the closing of coal-fired plants and develop green alternatives.
Creecy said negotiators are discussing what proportion of the climate funding pledged by the US, UK, Germany, France and European Union last year will be in the form of concessional loans and grants.
The US special presidential envoy for climate said that progress for the agreement is up to Ramaphosa, Bloomberg reported.
Visit to the US
Ramaphosa landed in Washington this Friday (16 September) and is set to meet with his counterpart President Joe Biden to discuss, among other things, energy, climate change, as well as trade and investment.
Speaking to the SABC, the international relations minister Naledi Pandor said in regard to Ramaphosa’s trip that detailed conversations have just begun in terms of the conditions that are set for the $8.5 billion agreement.
She said that a lot still has to be mapped out but is encouraged by signs that serious commitments to a Just Transition energy plan are being put forward – post COP27.
“This is probably one of the first times details around the plan are actually pursued.”
The big issue is around the promised funding, she added.
