South Africa concludes ‘turning to’ funding agreement to re …

The European Union, Germany, France, UK and US have partnered to support South Africa’s climate action goals by helping finance the shift from its heavy reliance on coal to cleaner and renewable sources of energy.

The countries, which announced their partnership with South Africa during the COP26 climate negotiations in Glasgow, Scotland, have pledged 131 billion rand over the next three to five years in grants. , concessional loans and investment and risk-sharing instruments, in particular by mobilizing financing from the private sector.

In addition to supporting the coal shift, just transition funding will be used to ensure communities and coal workers are supported as the country is weaned from the dirty energy source. It aims to help avoid up to 1.5 gigatons of emissions over the next 20 years.

“The partnership we have established today is a watershed moment not only for our own just transition, but for the world as a whole. It is proof that we can take ambitious climate action while increasing our energy security, creating jobs and exploiting new investment opportunities, with the support of developed economies, ”said President Cyril Ramaphosa in a press release.

Areas for which the funding will be used include investments in renewable energy and the development of new sectors such as electric vehicles and green hydrogen.

The funds will also be used to finance the reallocation of coal-fired power plants that are expected to be dismantled over the next 15 years, such as the Komati power plant, which is expected to be reused for solar and battery storage, among other uses.

Happy Khambule, Senior Policy Advisor for Greenpeace Africa, said Daily Maverick the partnership does not specify the details of the agreement and does not say how much the dismantling will be supported. He said the partnership also doesn’t mention whether the decarbonization target will include gas.

At the COP26 press conference launching the partnership, US President Joe Biden said: “By shutting down South African coal plants earlier than planned and investing in clean energy alternatives for the people of the South. Africa and by supporting a just and inclusive transition in the coal sector in South Africa, we are following through on the commitment made by the G7 partners in Cornwall to accelerate the coal transition in developing countries.

One of the main causes of South Africa’s high emissions has been Eskom, a major coal consumer, making the country the 12th largest emitter in the world.

With the aim of reducing its emissions and meeting the objectives of the Paris Agreement, the country had previously committed to reaching a peak in emissions by 2025. It recently adjusted its targets in accordance with the Paris Agreement at 1.5 ° C while advancing its date from net zero to 2030 from 2050.

In September, climate envoys from partner countries visited South Africa to assess the situation and develop a plan to end nearly 80% of the country’s dependence on coal.

European Commission President Ursula von der Leyen told the press conference that she hoped the partnership between the countries and South Africa would serve as a model for how other developing countries could achieve a just transition.

Dave Jones, an analyst with independent climate and energy think tank Ember, said: “Not only will this move South Africa beyond coal; it will also move the entire African continent beyond coal. South Africa is responsible for 89% of charcoal production in Africa. Construction of new coal has all but come to a halt in Africa, with only three coal-fired power plants commissioned since 2015, and only four currently under construction across the continent. “

The partnership comes after the latest blackout episode in South Africa which saw power cuts lasting up to four hours a day. Eskom is struggling to maintain its aging power plants, some of which are still struggling to complete.

Khambule said: “The deal is quite interesting. The amount that has been allocated to resolve the problem is far too small. When you look at it, you have to consider that in the power sector alone, an actor has about R400 billion in debt lying there… unusable assets lying around as well.

“The partnership, if it is seen as a catalyst for more mobilization in finance, then that’s a good thing. But if it doesn’t… that doesn’t really solve the magnitude of the problem.

Eskom spokesperson Sikhonathi Mantshantsha said Daily Maverick he was not aware of the partnership and Eskom made no comment. Mantshantsha said the utility will make an announcement when it is able to do so.

Jesse Burton, senior partner at coal transition consultancy firm E3G and researcher at the University of Cape Town, said the opportunity was exciting.

“[It is a chance] for South Africa to shape its just transition and address the social consequences of phasing out fossil fuels – not just existing legacy impacts, but those caused by a faster transition.

“On top of that, the partnership – which should be a long-term commitment that can attract more funding – will also support South Africa in building new areas of green growth,” Burton said.

In his opening statement to the World Leaders’ Summit, Von der Leyen urged countries to mobilize climate funds to help developing countries adapt to a rapidly changing and intensifying climate. Africa remains one of the most vulnerable continents, with average temperatures rising twice as fast as the global average.

Besides South Africa which is the 12th emitting country in the world thanks to companies such as Eskom and Sasol, the national utility was recently named the worst sulfur dioxide polluter in its category, surpassing China and the United States combined.

At COP15, held in Copenhagen in 2015, countries pledged $ 100 billion per year until 2020 to developing countries. Climate finance targets have not been met, with the most recent amount rising to around $ 80 billion in 2019. A report on the provision of climate finance from COP26 postponed funding until the end of 2023, with additional funding expected until 2025.

COP26 President Alok Sharma transferred responsibility for finance to private finance, stressing that developed countries ‘climate finance targets were insufficient to meet developing countries’ climate goal needs.

Sharma suggested that trillions of dollars were needed to meet climate goals for developing countries and that a partnership between world leaders and business was essential to achieve this.

The push for a just transition to renewable energy, which accounts for less than 10% of South Africa’s energy mix, has been met with a lack of enthusiasm by Mineral Resources and Energy Minister Gwede Mantashe .

The minister has publicly stated his preference for a phase-out of coal as the country examines its options and a transition to nuclear and gas, highlighting the tightly available resources of Mozambique’s liquefied natural gas project.

Besides South Africa which is the 12th emitting country in the world thanks to companies such as Eskom and Sasol, the national utility was recently named the worst sulfur dioxide polluter in its category, surpassing China and the United States combined.

Such emissions are dangerous to surrounding communities, causing respiratory health problems and associated illnesses. A just transition to cleaner coal would ideally leave coal communities newly skilled, employed and endowed with renewable energy.

Alex Lenferna, activist at 350Africa.org, said the Climate Justice Coalition had called for a swift transition to renewable energy to meet the demands of the 21st century.

“We also protested against the biggest obstacle to change, namely Minister Mantashe and his DMRE [Department of Mineral Resources and Energy]. They want to keep us locked in obsolete, expensive and polluting coal and gas, rather than embrace a cleaner, more affordable and job-creating energy future that could be unlocked, ”said Lenferna.

Burton said the partnership shows that global collaboration for climate action is possible. However, she said more details were needed on the funding terms.

A joint working group will be set up to provide further details on the partnership.

“I think the bottom line is that it sent a strong political signal about where South Africa is heading. Now the hard work of designing and implementing our just transition must begin, ”said Burton. DM / OBP

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