South Africa eyes $2.4 billion from climate pact in 2024
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South Africa’s National Treasury expects as much as $2.4 billion to flow into the country in 2024 from a climate finance pact with some of the world’s wealthiest nations.
Recently, the country secured pledges worth $9.3 billion in grants, loans, and guarantees under the Just Energy Transition Partnership (JETP).
Mmakgoshi Lekhethe, deputy director-general for asset and liability management at the National Treasury, spoke to reporters on the sidelines of a conference in Pretoria. Lekhethe said, “We are currently engaging with the partners to raise further funding from the JET package. The ultimate objective really is to move toward developing a good growth strategy.”
Similar climate finance pacts have been developed in Vietnam, Senegal, and Indonesia.
Cumulatively, the JETPs account for more than $40 billion in investment pledged to developing countries. The countries are expected to lessen their dependence on climate-warming fossil fuels through the funding.
The financing to South Africa underpins the nation’s Presidential Climate Commission’s recommendation that the government set up a body to guide and raise investment in the energy transition.
Read more: South Africa Climate Commission proposes new body for energy transition funding
The latest setback to South Africa’s energy transition program occurred in June when the country requested the World Bank-linked Climate Investment Funds (CIF) to permit the operation of three coal-fired plants at reduced capacity instead of closing them as initially agreed.
South Africa has to now present a plan to the CIF by the end of October outlining how to implement this change.
Approval of this plan is essential to secure $500 million in concessional loans from the CIF, which would then unlock an additional $2 billion in funding from development finance institutions and private companies.
South Africa relies on coal for about 80% of its electricity generation and has the most carbon-intensive economy of the Group of 20 nations.
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