The South African government has pledged to reduce its emissions trajectory to 34% below business as usual by 2020, and to 42% by 2025.
The Department of Trade and Industry says the country will unveil the South African Renewables Initiative (SARi) during the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP 17), which takes place in Durban, from 28 November to 9 December.
It says the objective of SARi, which is an integral part of the Industrial Policy Action Plan, is to develop related industrial capabilities through the design of a financial solution for the rollout of large-scale renewable energy generation capacity.
“SARi presents a key element in ensuring that SA meets the emissions targets set by President Jacob Zuma... at COP 15, in Copenhagen, in 2009,” says Minister of Trade and Industry, Rob Davies.
The rolling out of SARi will be accompanied by the announcement of partnerships between the South African government and international governments and development finance institutions, which will work together to explore possibilities for developing the enhanced financing arrangements needed to catalyse growth in the renewables industry.
Davies adds that an initial design for a financing mechanism has been developed that combines low-cost loans, insurance and other financial instruments with climate funding on a pay-for-performance basis.
The key task of the international partnership in 2012 will be to support SA to develop this concept into its operational financial mechanisms, and to secure funding to enable an ambitious scale up of renewables.
In a recent report, market research firm Frost & Sullivan revealed that although Africa is endowed with fossil and renewable energy resources, which could more than adequately cover its energy needs, it remains the most poorly-electrified continent in the world.
It states that development of the renewable energy sector in Africa will lead to a diversification of the generation mix, a decreased dependency on a singular feedstock, and greater security of supply.
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