South Africa: Bulk of US$8.5 Billion From Rich Nations Will go to Electricity Infrastructure

Google+ Pinterest LinkedIn Tumblr +
  • 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.

Related news: South Africa’s energy transition must be cognisant of the country’s objective realities

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.

Related news: Renewable energy jobs will not offset the loss of coal sector jobs in South Africa

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

Source: Bloomberg


Leave A Reply

About Author

Green Building Africa promotes the need for net carbon zero buildings and cities in Africa. We are fiercely independent and encourage outlying thinkers to contribute to the #netcarbonzero movement. Climate change is upon us and now is the time to react in a more diverse and broader approach to sustainability in the built environment. We challenge architects, property developers, urban planners, renewable energy professionals and green building specialists. We also challenge the funding houses and regulators and the role they play in facilitating investment into green projects. Lastly, we explore and investigate new technology and real-time data to speed up the journey in realising a net carbon zero environment for our children.

Copyright Green Building Africa 2024.