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South Africa clinches R130bn renewable energy deal

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The South African government, yesterday at the COP26 UN Climate Summit in Glasgow, announced a R130 billion renewable energy deal with the UK, US, Germany, France and the EU.

The climate finance deal aims to accelerate the country’s transition to renewable energy and away from coal.

The funds would go to support coal workers and dependent communities, and include provision for Eskom to repurpose its aging coal power plants.

SA also aims to invest in the development of new sectors such as electric vehicles and green hydrogen, while providing for the economic inclusion of historically marginalised communities and sectors of society.

In preparation for COP26, South Africa submitted a revised Nationally Determined Contribution (NDC) to reduce domestic carbon emissions to within a target range for emissions of between 420 CO2-eq and 350 CO2-eq by 2030, says the Presidency in a statement.

It notes this revised target is compatible with the ambitious goals of the Paris Agreement and represents the country’s best effort to confront climate change, which will have a devastating impact on Sub-Saharan Africa without large-scale mitigation and adaptation efforts.

Through the Political Declaration issued yesterday to establish this partnership, partner countries will mobilise an initial $8.5 billion (R131 billion) over the next three to five years through a range of instruments, including grants and concessional finance, to support the implementation of South Africa’s revised NDC through a just transition to a low carbon and climate resilient economy.

The Presidency says the highly concessional finance that will be mobilised through this partnership will accelerate investment in renewable energy and the development of new sectors.

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.

Welcoming this partnership, president Cyril Ramaphosa said: “Climate change is an existential challenge that confronts us all, and South Africa is committed to playing its part in reducing global emissions.

“The partnership that we have established today is a watershed moment not only for our own just transition, but for the world as a whole. It is proof that we can take ambitious climate action while increasing our energy security, creating jobs and harnessing new opportunities for investment, with support from developed economies.”

According to the South African government, bold and ambitious actions are required from all countries to confront climate change and SA has consistently argued that developed economies must support a just transition in developing economies.

“Today’s Political Declaration represents a first-of-its kind partnership to turn these commitments into reality, and a model for similar forms of collaboration globally,” says the Presidency.

“At the heart of this partnership is the importance of a just transition, which includes support for workers and communities affected by the transition away from coal and enables the creation of quality green jobs. For the transition to be just, decarbonisation must be implemented in a manner that promotes and sustains employment, livelihoods and economic inclusion for historically marginalised communities and sectors of our society. A joint taskforce will be established to take forward the partnership over the coming months.”

Civil society groups like the Climate Justice Coalition have been calling for a ‘Green New Eskom’ as part of a rapid and just transition to renewable energy. 350Africa.org, a leading member of the coalition, says: “If done right, this deal could pave the way to a renewable energy future that works for all.

“To help make such a reality possible, the Climate Justice Coalition has been calling for a Green New Eskom suited to the demands of the 21st century.

“We have also been protesting the biggest obstacle to change, namely [mineral resources and energy] minister [Gwede] Mantashe and his Department of Mineral Resources and Energy. They want to keep us locked into outdated, expensive and polluting coal and gas, rather than embracing the cleaner, more affordable and job-creating energy future that could be unlocked.”

Environmental activist group Greenpeace Africa says it welcomes the announcement of concessional finance for a just transition.

“It is imperative that these finances are earmarked for just transition projects and not used as a ploy to ensure the longevity of carbon majors such as Sasol, who will use this as an opportunity to prop up their fossil-fuel-derived hydrogen projects. Now more than ever, security must follow our government to ensure these finances serve their designated purpose and are not looted by our unscrupulous rent-seekers.

"Now, we need to see that the South African government has the political will not only to say the right thing, but to do the right thing by undertaking a real just transition,” comments Greenpeace.

“This must not become another empty promise paying lip service to climate justice. The president once called: Thuma Mina. We have sent you; now, deliver."

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