- Bloomberg reports that the South African government will invest the bulk of an US$8.5 billion (R152 billion) climate-finance deal to strengthening the transmission grid and modernising the electricity-distribution system.
- The rest will go toward the development of green-hydrogen and electric-vehicle industries.
The funding, pledged by the US, UK, the European Union, Germany and France, was unveiled at last year’s United Nations-led climate talks in Glasgow, Scotland. The investment plan comes the week before world leaders gather at the follow-up summit in Egypt. The so-called Just Energy Transition Partnership is expected to serve as a prototype for similar deals with coal-dependent, developing nations such as Vietnam, Indonesia and India.
The investment plan envisages US$7.6 billion being invested in electricity infrastructure, $700 million in developing green-hydrogen projects and $200 million in an electric-vehicle industry over the next five years.
Those allocations are well below the $84 billion the government says is required – with $47.2 billion needed for the electricity sector, $21.2 billion for green hydrogen and $8.5 billion for electric vehicles.
The package “is not sufficient to meet the scale of our ambition going to COP27. That is the message we will be taking forward,” Ramaphosa said in a webcast address. “Our plan can really only be fully and properly executed if there is more grant funding and funding made available in concessional loans and investment packages.”
Of the total $8.5 billion, it’s envisaged that $5.3 billion of the funding will be in the form of low-cost loans, commercial credits will make up $1.5 billion of the total and guarantees $1.3 billion, according to the plan. The EU, the US and France will each contribute about $1 billion each to the package, with Germany providing $968 million and the UK $1.8 billion, including $1.3 billion of guarantees.
Author: Bryan Groenendaal