Page 14 - AfrElec Week 46 2021

AfrElec CLIMATE FINANCE AfrElec

South Africa’s $8.5bn climate finance

is stiill only an offer, not a deal

SOUTH AFRICA THE $8.5bn in climate finance pledged by the state-owned power utility Eskom has prom-
UK, US, France and Germany is an “offer” and ised to close down its coal power stations before
not a deal, South Africa’s Public Enterprises Min- the end of their normal lifespan, over the next
ister Pravin Gordhan has told the South African 15 years. When announcing the deal the South
parliament. African government said it would be used in
“This is an offer from the developed coun- part to fund Eskom to build a strong renewable
tries, it is not a deal,” he said, adding that funds energy sector.
would not go towards servicing state-owned Gordhan said negotiations would now take
power utility Eskom’s crippling ZAR400bn debt. place at a technical level to determine if the offers

He also emphasised that the funds would be were compatible with South Africa’s financial
specifically used for Eskom’s energy transition, requirements and capabilities.
enabling the power utility to move from coal to “Until negotiations are completed, we will
cleaner green technologies. keep the national assembly informed,” Gordhan
Gordhan was answering questions in parlia- said.
ment on 17 November on South Africa’s water- He explained that a group of ministers, led by
shed multi-billion-dollar climate finance deal South Africa’s Environment, Forestry and Fish-
announced at the COP26 climate talks in Glas- eries Minister Barbara Creecy, would negotiate
gow two weeks ago. on the offer. “A technical team has been estab-
South Africa committed to ambitious targets lished and includes South African lenders and
at the talks to attract billions in climate funding experts as well as international experts, to engage
from wealthy nations. South Africa is among in negotiations.”
the most coal-dependent nations in the world, Crucial points to be discussed were how
and its commitments were seen as a huge mile- much of the funding is to be grant money, and
stone at the conference.The deal will be closely just how “concessional” the concessional funding
watched to see if it can be copied as a model for will be.
other developing countries looking to move Gordhan said the deal was a “government
away from coal. project” and not specifically an Eskom project,
The historic deal saw France, Germany, the and the money would also be used for two other
United Kingdom and the United States, as well projects - a green hydrogen project and the pro-
as the European Union, pledge $8.5bn over the duction of electric vehicles in South Africa.
next three to five years in the form of grants, con- The $8.5bn is “merely a start”, the minister
cessional loans and investment and risk-sharing said and does not cover all of South Africa’s tran-
instruments, including mobilising private sector sition issues and more climate funding would
funding. need to flow to South Africa to help it cut down
In return for the funds, South Africa’s on its coal dependancy. ™

P14 www. NEWSBASE .com Week 46 18•November•2021