- The Climate Investment Funds (CIF), one of the world’s largest multilateral funds for climate action in developing countries, endorsed new investment plans set to allocate $1 billion for a just transition from coal to clean power in South Africa and Indonesia.
The decision intends to equip each country with access to $500 million in concessional, risk-bearing capital from CIF’s Accelerating Coal Transition (CIF ACT) investment program to build momentum toward ambitious climate, energy, and development goals. The availability of finance will also directly support and catalyze funding for country platforms such as South Africa’s Just Energy Transition Partnership.
The new investment plan paves the way for South Africa to retire several coal-fired power plants, replacing their generation capacity with clean power and energy storage systems. Workers and local communities affected by the transition, including women and other vulnerable groups, will benefit from resources to access new employment opportunities and influence decision-making.
The CIF ACT-supported decommissioning could prevent approximately 71 million tons of CO2 in potential GHG emissions, equivalent to taking nearly 14 million gasoline-powered cars off the road for a year.
CIF finance will also enhance governance and build capacity of provinces, municipalities, and local communities to manage just coal transitions. In parallel, the new capital will promote investment in community infrastructure, new revenue streams for small, medium-sized, and micro climate-smart businesses, and job creation through the scaling-up of energy efficiency and distributed generation programs.
87% of South Africa’s installed generation capacity comes from aging coal-fired power plants, responsible for nearly half of the country’s carbon dioxide emissions and frequent outages.Last year, South Africa announced an ambitious climate plan which emphasized the decarbonization of its electricity sector.
Minister of Forestry and Fisheries and Environmental Affairs of the Republic of South Africa, Barbara Creecy:
“A just energy transition that is procedurally just, equitable in sharing risks and opportunities, and one that is restorative, is a climate and developmental imperative that we can no longer ignore. I welcome the decision by the Climate Investment Funds’ governing body to approve $500 million in concessional resources under the ACT Investment Program. Noting that estimates indicate that over the next 8 years South Africa needs over $60 billion in investments to effect the transition, the CIF ACT finance will make a meaningful contribution towards South Africa walking down that ambitious pathway to a brighter future of our people, addressing our energy needs, promoting sustainable development and leaving no one behind.”
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Author: Bryan Groenendaal