Page 19 - SA Chamber UK - September Newsletter- eBook

start. The major coal-processing companies
had spotted the shift early and were already

investing heavily in renewables. “They have
been printing money since the invasion of
Ukraine and now they are ploughing their
profits from the coal bonanza into the green
economy,” he said.

On the other hand, there was a coalition of
rent-seekers close to politically-connected
people and the trade unions who had a vested
interest in the continuation of coal for as long

as possible. It was no secret that Minister of
Minerals and Energy was committed to the
coal economy and had been a factor in the
infighting which had exacerbated delays in
finalising the details of the JETP.

“I think eventually the momentum of the
transition will transcend and overwhelm the rent-seekers and their plans to extend the life of
coal will get bogged down in endless litigation,“ said Olver.

Funding the Transition

South Africa’s ailing economy would not be able to fund the transition on its own. Even the
$8.5bn (R160bn) – made up of concessional guarantees, loan finance and some grants – is
a drop in the ocean when compared with the estimated $62.5bn (R1.5tr) that South Africa’s
transition will cost in the first five years according to SA government estimates.

Over three decades the bill is estimated at $250bn, according to a 2022 report issued at the
World Economic Forum in Davos. The JET nations invested in the partnership, on the other
hand, see the pact with South Africa as a pilot project which could be used as prototype to
roll out similar agreements with other nations in the developing world. African Development
Bank (ADB) President Akinwumi Adesina estimates the cost of compensation for the continent

quitting fossil fuels to be in the order of $1.5trn over 30 years.

At COP-27 the wealthy nations agreed to raise $2.7trn over 30 years in compensation for
“loss and damage” from climate change. But there has been no further detail on the plan

regarding quantum or time-frame.

By comparison of scale, the US Marshall Plan for the reconstruction of Europe after WWII
cost $13.3bn at the time which would be about $150bn in today’s money.

- By John Battersby, Journalist, SA Chamber Advisory Board

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SA CHAMBER UK NEWSLETTER SEPTEMBER 2023