Page 7 - AfrElec Week 39 2022
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AfrElec INVESTMENT AfrElec
AfDB suggest using SA’s
$8.5bn of climate finance
to unlock more cash
SOUTH AFRICA THE African Development Bank (AfDB) has green energy sources and an expanded electric-
proposed a plan under which South Africa could ity grid.
use $8.5bn in climate financing pledged by some South Africa’s coal facilities, which gener-
nations to raise more funds. ate about 80% of the nation’s electricity, are 35
Germany, France, the US and UK announced years old on average and so increasingly prone
at the United Nations Climate Change Confer- to breakdowns. Amid the frequent breakdowns
ence in Scotland late in 2021 a commitment to as well as theft of power infrastructure, South
provide the financing to help Africa’s most pol- Africa experiences blackouts, sometimes as long
luting nation develop cleaner energy sources as 10 hours daily.
instead of continued reliance of coal. According to Bloomberg, the government
AfDB President Akinwumi Adesina recom- is working on a plan to access the funds from
mended, according to Bloomberg on September the four rich nations, which will be a combi-
23, that South Africa park the funds in a special nation of grants, concessional financing and
purpose vehicle (SPV), which can seek a credit potentially guarantees. The structure of the
rating and sell zero-coupon bonds to raise as funding arrangements, which may be on a pro-
much as $41bn. ject-by-project basis, could make it impossible to
A May 2022 report by the Blended Finance use an SPV structure.
Taskforce of UK and the Centre for Sustainability AfDB’s proposal has little support from South
Transitions at the University of Stellenbosch in Africa or the funding partners, people with
South Africa said the country will need to spend knowledge of the matter told the news agency.
$250bn over the next three decades to fund the
closing down of coal-fired power plants, develop
Week 39 29•September•2022 www. NEWSBASE .com P7
