Rich nations, including the United States and the United Kingdom, have announced $8.5 billion (R131 billion) in funding over the next three to five years to speed up South Africa’s move from coal to clean energy.
South Africa, the world’s 12th-biggest emitter of greenhouse gases, depends on coal to generate most of its electricity.
It will receive a range of funding, including grants and concessional finance, to accelerate investment in renewable energy and the development of green hydrogen.
The plan will involve closing South African coal stations ahead of schedule, Joe Biden told reporters at the Conference of the Parties (COP).
The partnership also includes France, Germany and the European Union.
US President Joe Biden said he’s offering an alternative to China’s plan to build infrastructure in countries that are among the most vulnerable to climate change. At the same time, his special envoy, John Kerry, sees finance pledges approaching the $100 billion annual target.
Much of the focus of Day Two at COP26 in Glasgow is on aid to developing nations, with a separate push for more private sector money for the energy transition.
President Cyril Ramaphosa said the partnership would support a just transition to a low carbon economy and a climate-resilient society in South Africa.
South Africa submitted a revised Nationally Determined Contribution (NDC) to reduce domestic carbon emissions to within a target range for emissions of between 420 CO2-eq and 350 CO2-eq by 2030.
“This revised target is compatible with the ambitious goals of the Paris Agreement and represents our country’s best effort to confront climate change,” Ramaphosa said. “The initial R131 billion will support the implementation of our revised NDC.”
One of the resolutions of the “Political Declaration on the just energy transition in South Africa” is to establish an inclusive task force comprised of South African and international partners.
This task force has set deadlines to meet over the next 12 months, with its first set of commitments deliverable within six months.
Within a calendar year, the task force must:
- Develop a complete programme of work for this partnership based on an investment plan for the just energy transition of the South African government, including support to address the social and economic impacts.
- Provide a leaders’ level update to review progress.
- Identify potential financing instruments and policies that will act to improve Eskom’s long term financial sustainability.
- Work to address South Africa’s longer-term funding needs to lower emissions across all sectors of the economy.
- Identify how to leverage further financial resources, including domestic resources, to that effect.
The funding commitment for South Africa’s migration from coal comes after Eskom announced it would convert its Komati power plant to generate energy from renewable sources.
Komati’s last coal-fired generation unit is due to shut down next year.
Eskom previously said it would need $10 billion (R155 billion) to shut down most of its coal-fired plants by 2050.
Andre de Ruyter, CEO at Eskom, created a funding plan involving a multi-lender loan facility from development finance institutions that would be paid out in segments over several years to obtain the required funds.