Ramaphosa secures COP26 green finance deal worth billions
This is the first significant financing deal to emerge from the landmark climate conference in Glasgow
President Cyril Ramaphosa has announced that SA has secured a commitment of R130bn of highly concessional climate financing from developed countries and the EU to help SA transition away from coal to cleaner forms of energy.
The governments include the UK, the US, France and Germany. The commitment was agreed on in a political declaration finalised at COP26 in Glasgow, and is the first significant financing deal to emerge from the landmark climate conference. COP26 has set the goal of raising $100bn (R1.545-trillion) a year for the next five years to assist developing countries with climate change mitigation and adaptation.
“Through the political declaration issued today to establish this partnership, partner countries will mobilise an initial $8.5bn (R131bn) over the next three to five years through a range of instruments, including grants and concessional finance, to support the implementation of our revised NDC through a just transition to a low-carbon and climate-resilient economy,” Ramaphosa said in a statement on Tuesday.
He said the financial resources would “accelerate investment in renewable energy and the development of new sectors, such as electric vehicles and green hydrogen. 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.”
The R131bn commitment follows a letter of intention from the Climate Investment Funds (CIF) to assist SA with grant funding of between $200m (R3bn) and $500m (R7.7bn), depending on the presentation of an acceptable plan.
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.President Cyril Ramaphosa
In making the funding commitments, both the CIF and the governments concerned have recognised SA’s ambitious commitment to reducing greenhouse gas emissions that was made at COP26. In making such a commitment the South African government has emphasised that SA, like developing countries, requires financial assistance in meeting emissions targets.
COP26 is seeking to halve carbon emissions by 2030 and reach carbon neutrality by 2050. However, not all countries have made commitments in line with these goals.
SA has committed to a “just energy transition”, which entails protecting and supporting those workers and communities whose livelihoods have been built on the carbon economy.
“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 task force will be established to take forward the partnership over the coming months,” Ramaphosa said.