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Bloomberg ($):

A group of the world’s richest nations offered South Africa debt guarantees as part of a proposed $8.5 billion deal designed to cut the nation’s reliance on coal for power generation, people familiar with the talks said, potentially resolving one sticking point in the negotiations. 

The guarantees would enable South Africa or companies such as state power utility Eskom Holdings SOC Ltd. to borrow money needed to close down coal-fired power plants and enable the generation of renewable energy, one of the people said. The people asked not to be identified as the talks aren’t public.

Such an arrangement would alleviate pressure on the South African government to guarantee any debt Eskom may need to fund its transition to renewable energy, the person said. By March this year, the National Treasury had extended 560.1 billion rand ($35 billion) of guarantees to state companies, with Eskom accounting for about 79% of that.

Concessional loans and grant funding would be included in the support, which was announced at the COP26 climate summit last year, and may be extended over the next three to five years. The deal is being funded by the US, the UK, Germany, France and the European Union.

[Antony Sguazzin and John Ainger]

More: Rich Nations Offer Debt Guarantees on South African Climate Deal

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