South Africa‘s president, Cyril Ramaphosa, announced today that France, Germany, the United Kingdom and the United State will provide $8.5 billion in funds to help the country achieve the new carbon emission targets that were presented in the Nationally Determined Contribution (NDC) brought to the COP26 conference in Glasgow, UK.
“The highly concessional finance that will be mobilised through this partnership will accelerate investment in renewable energy and the development of new sectors such as electric vehicles and green hydrogen,” the president said in a statement released. “This will provide a significant boost to investment and growth while ensuring Eskom can access resources to finance repurposing of coal-fired power stations due for decommissioning over the next 15 years.”
The funds should be allocated through multilateral and bilateral grants, concessional loans, guarantees and private investments. A task force will now seek to identify initial sources of financing for the electricity and coal mining sectors, as well as financing options for the development of electromobility and green hydrogen.
“The details still need to be worked out by a joint task force, but the funds are intended to expedite South Africa’s transition away from its coal dependency through growth in clean energy,” Chris Ahlfeldt, an energy specialist at Blue Horizon Energy Consulting Services, told pv magazine. “It will likely be allocated through private investments and includes support for workers affected by the transition away from coal. It will also be interesting to see how much of these funds will be used to assist Eskom’s with its spiraling debt which is currently over three times larger than the entire US$8.5 billion pledge.”