SA’s climate grant funding doubles to $676m

SA has secured $676m in grants from other nations for a transition to green energy, more than double what they initially promised but still only a fraction of the total package, the rest of which it will have to repay with interest.

Rudi Dicks, head of project management in the presidency, said on Thursday that SA had been pushing for more of the $12bn on offer from Western nations to take the form of gifts rather than loans.

The grant had initially been set at $329.7m.

“The president has made it very clear that he wants to see an increase in the grant component,” he said, adding that more grants could come in as the country heads to COP28 climate talks in Dubai in November.

Britain, France, Germany, the EU and US pledged $8.5bn at the climate talks two years ago, a figure which has since gone up as the Netherlands and Denmark, Canada, Spain and Switzerland joined the initiative this week.

But SA authorities estimate the total cost of SA’s transition from carbon-intensive coal — which generates 80% of its power and is used to synthesise a third of its liquid fuel —  will be R1.5-trillion.

Dicks added that SA was in negotiations to possibly increase both the total package and the share taken up by grants at the talks, in which SA will present details on how it plans to spend the money.

SA says its needs to develop skills in sectors such as solar generation, electric vehicles and green hydrogen, assist coal miners losing their jobs and attract the private sector to invest in what it says are lower return projects.

It aims to retire coal plants, ramp up renewable capacity and establish a green hydrogen export hub, among other things.

“The implementation plan will go for cabinet’s approval by the end of October and will be presented at COP28,” Dicks said.

Reuters