South Africa to secure $2.6 billion deal for shut down of CFPPs and grid upgrades
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South Africa is preparing for a transition in its energy sector, seeking $2.6 billion in climate finance by proposing a revised timetable for closing coal-fired power plants.
This initiative, part of the Just Energy Transition Partnership, aligns with global efforts to reduce carbon emissions and shift towards renewable energy sources.
The funding will facilitate the closure of coal plants, enable grid upgrades, promote renewable energy generation, and foster economic diversification in coal-reliant communities.
Also read: G7 reaches agreement to shut down CFPPs by first half of 2030s – Sustainability Economics News
South Africa plans to present a revised timeline for the shutdown of coal-fired power plants to secure approximately $2.5 billion in climate finance, according to an agency within President Cyril Ramaphosa’s office.
This proposal, which will be submitted to the Climate Investment Funds in June, is part of efforts to qualify for funding under the Just Energy Transition Partnership, a $9.3-billion agreement involving some of the world’s wealthiest nations.
As part of this pact announced in 2021, South Africa will receive assistance contingent upon reducing its reliance on coal, which currently generates four-fifths of the nation’s electricity.
Also read: Australian pension fund halts thermal coal investments – Sustainability Economics News
“What we are presenting to the CIF is an adjustment to the decommissioning plan linked to an emissions target that we have to achieve,” said Neil Cole, a finance manager at the Project Management Unit, which is overseeing the JETP for South Africa, within the presidency.
If the proposal is accepted, South Africa will secure $500 million in loans with terms of 10 to 30 years, featuring an interest rate of less than 1% and an eight-year grace period.
As Cole mentioned in an interview, these loans would be provided by the World Bank-affiliated Climate Investment Funds (CIF).
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