Page 18 - AfrElec Annual Review 2021

AfrElec NOVEMBER AfrElec

South Africa becomes poster boy for

just transition in developing world

SOUTH AFRICA SOUTH Africa is to benefit from ZAR131bn Ursula von der Leyen, President of the EU
($8.5bn) of climate finance from the world’s Commission, said she hoped the partnership
richest countries in a bid to meet the targets of with South Africa would be a blueprint for other
the Paris Agreement and to reduce significantly developing nations.
the country’s reliance on coal power. While the South African government wel-
The deal was described by South African comed the deal, as it gives access to $8.5bn of
President Cyril Ramaphosa as an “historic financing, South African environmental justice
partnership … to support a just transition to groups, long critics of Eskom and the South Afri-
a low-carbon economy and a climate resilient can government, were far more cautious.
society.” “While this partnership is a step forward, it is
The US, the UK, France, Germany and the a first step – South Africa’s need is much greater
EU are to provide the cash over the next three than the $8.5bn proposed”, said groundWork’s
to five years through a range of instruments, director, Bobby Peek.
including grants and concessional , to “To achieve a Just Transition to a zero-carbon
support the implementation of the revised NDC. economy, South Africa needs climate finance
The cash will be directed to such areas as elec- that is transformational. For Mpumalanga alone,
tric vehicles (EVs) and green hydrogen, while at least $1bn is needed only for worker support
state-owned utility Eskom is to gain access to and other direct Just Transition interventions,”
the cash to finance the repurposing of coal-fired said Peek.
power-stations due for decommissioning over South Africa’s Life After Coal Campaign
the next 15 years. stressed that the key target for any financing
The deal was accompanied by a political dec- must be Eskom’s debt.
laration, where South Africa argued that devel- “Any finance must address the issue of
oped economies must support a just transition in Eskom’s debt. Without addressing the paral-
developing economies. The deal is the first of its ysis caused by Eskom’s debt burden – beyond
kind that is trying turn such arguments commit- Eskom’s debt management strategy (of tar-
ments into reality, and a model for similar forms iff increases, addressing municipal debt and
of collaboration globally. cost inefficiencies) – no progress can be made
The deal also requires a joint taskforce, made towards economic and social justice, which are
up of representatives from both South Africa and essential elements of the Just Transition,” it said.
the donor countries, that will take forward the The money involved is still less than previ-
partnership over the coming months. ous estimates of the costs needed to move away
The declaration called for a just transition from coal. Furthermore, as South Africa has the
that protects vulnerable workers and communi- highest carbon intensity of G20 countries, its
ties, especially coal miners, women and youth, structural needs are especially acute, as its high
affected by the move away from coal. reliance on coal both as a generating fuel and as
Crucially, the declaration also mentioned an industry that support millions of workers.
the fragile status of Eskom and called for it to be Eskom chief Andre de Ruyter has recently
managed successfully and sustainably. warned that ZAR440-ZAR500bn ($28-32bn)
The statement also called for policy reform in was needed to support the ailing power utility’s
the electricity sector, such as unbundling and transition to greener technologies.
improved revenue collection, and a clearer role Meanwhile, McKinsey said in a report as
for the private sector. much as ZAR2.3 trillion ($149bn) could be
Ahead of COP26, South Africa submitted to needed to shift away from coal by 2050.
the UNFCCC a revised Nationally Determined What the deal illustrates is just how depend-
Contribution (NDC), which said the coun- ent the global south is on climate finance from
try would reduce domestic CO2 emissions to the world’s wealthier countries. South Africa
within a target range of 350-420mn tonnes per may be a member of the G20, but its economic
year (tpy). and structural needs are high.
US President Joe Biden said the partner- Furthermore, with millions living in poverty,
ship between the four nations and South Africa the country’s transition to a green economy has
would see the country closing its coal plants to be just. Its workers are more vulnerable to the
ahead of the current schedule while supporting economic fall-out of phasing out coal than those
a just transition to renewables. in wealthier countries.™

P18 www. NEWSBASE .com Annual Review 2021