South Africa risks $9.3 billion climate finance pact over delayed coal plant closures
A panel appointed by South Africa’s environment minister said the country is risking a $9.3 billion climate finance pact by delaying the closing of several coal-fired power plants, Bloomberg reported.
In 2021, through the Just Energy Transition Partnership (JETP), South Africa received significant pledges from wealthy nations in loans, grants, and guarantees. They offered support to reduce South Africa’s coal dependency on the condition of phasing out older, high-polluting coal plants.
However, in 2023, Eskom Holdings SOC Ltd., South Africa’s state power utility, faced the most severe power cuts ever recorded, prompting them to postpone the shutdown of three power plants: Grootvlei, Hendrina, and Camden.
These plants were initially scheduled for decommissioning but will continue operations until 2030 due to the urgent need to maintain electricity supply stability in response to the power shortages experienced.
Read more: South Africa to secure $2.6 billion deal for shut down of CFPPs and grid upgrades
A panel appointed by Environment Minister Barbara Creecy expressed concern over Eskom’s decision to extend the operation of the plants beyond their original planned lifespan, noting that these plants emit the highest levels of greenhouse gases per unit of electricity produced among all 14 facilities operated by Eskom.
South Africa, which generates approximately 80% of its electricity from coal, possesses the most carbon-intensive economy among the Group of 20 nations, comprising the world’s largest economies.
According to a report by the National Environmental Consultative and Advisory Forum, JETP partner nations recognize South Africa’s energy security concerns, Bloomberg said.
However, there’s worry that not adhering to the government’s rapid decarbonization goals, submitted to the UN, might risk this financial support. The report indicates partner nations may not accept substantial deviations from these plans.
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