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South Africa is risking a R168,32 billion climate finance pact by delaying the closing of a number of coal-fired power plants, a panel appointed by the country’s environment minister said.
In an agreement known as the Just Energy Transition Partnership, South Africa won the bulk of the pledges from some of the world’s richest nations in loans, grants and guarantees in 2021.
They offered to help the country reduce its dependence on coal for power generation on condition it phased out a number of its older plants using the dirtiest fuel.
The worst power cuts on record last year prompted Eskom, the state power utility, to delay shutting down the facilities.
Eskom has said it has decided to postpone the decommissioning of three power plants — Grootvlei, Hendrina and Camden — until 2030.
A unit in the South African presidency earlier this month made a presentation about the nation’s new plans to the World Bank-linked Climate Investment Funds, which is considering allocating US$500 million to South Africa. Financing from the fund could trigger a further US$2 billion in investment from other partners.
The content and outcome of those discussions haven’t been disclosed.
The JETP partner nations have been understanding of the energy security concerns but a misalignment with the goal of rapid decarbonisation to the lower level of an emissions target range the government submitted to the United Nations could risk this finance, the National Environmental Consultative and Advisory Forum said in its report.
They are unlikely to tolerate a significant reversal of the plans, according to the report.
The UK, US, France, Germany and the European Union signed up to the pact in 2021 while the Netherlands and Denmark joined later.
South Africa generates about 80 percent of its electricity from coal and has the most carbon-intensive economy of any of the Group of 20 nations (G20), which comprises most of the world’s largest economies.— Bloomberg.
Online Reporter