US$3.3 billion raised to support climate change, energy and just transition in South Africa

  • Government has raised US$3.3 billion so far from Multilateral Development Banks and International Finance Institutions to support climate change, energy, and just transition objectives according to South Africa’s Finance Minister, Enoch Godongwana during his 2024 National Budget Speech yesterday.
  • He added that National Treasury plays a crucial role in mobilising resources, designing incentives, and influencing policy to mainstream climate change. 

“As climate-related disasters intensify, a multi-layered risk-based approach is being developed to manage the associated fiscal risks.  This considers various funding instruments from grants to contingency funds, including the Climate Change Response Fund, depending on the incidence and intensity of the disaster event.

“The National Treasury is reviewing disaster response grants to improve efficiency and create incentives for disaster planning, preparedness and risk reduction. It is also developing a climate-budget tagging framework to influence policy, planning, and budget decisions, by tracking climate-related expenditures in public budgets,” the Minister said on Wednesday in Parliament.

He said the support of concessional funding providers, such as Multilateral Development Banks, is going a long way to support the country’s climate adaptation, mitigation, energy transition, and sustainability initiatives.

“Crowding-in the private sector is necessary to managing the climate disaster funds. We are actively participating in climate negotiations, aligning with the government’s advocacy for reforming multilateral finance institutions.

“We are also working with eight municipalities to adapt and mitigate the effects of climate and weather-related events, by providing technical assistance for climate-responsive capital projects,” the Minister said.

According to the 2024 National Treasury Budget Review, the department is finalising a disaster risk financing strategy, centred on innovative financing and risk transfer to effectively mitigate climate impacts.

The strategy will boost state capacity to fund disaster recovery efforts and expand insurance mechanisms to protect against the financial strain of natural disasters.

Author: Bryan Groenendaal

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