LETTER: This easy win will build trust in climate funding

In “Countering the climate crisis: How South Africa’s response is hotting up” (Cover Story, August 15-21), the presidential climate commission’s (PCC’s) red-flagging of the need to develop more trust in climate financing, coupled with the National Treasury’s ongoing work to innovate for sustainable green financing, was rightly highlighted.

But in South Africa’s quest to attract more, and significant, climate financing and investments, we are overlooking an essential component of that trust: bolstering the good work that’s already delivering the right results for our renewables transition. And that starts with the two-year climate financing incentive put in place by the Treasury to encourage investments in new renewables, mostly solar, for businesses and individuals through section 12BA of the Income Tax Act. That incentive is due to expire at the end of February 2025.

The PCC’s report also noted that investments between R334bn and R535bn a year are required for South Africa to meet its net zero targets by 2050, yet an average of just R131bn a year has been committed.

It’s clear that we need every financial instrument and incentive to be pulling in the same, consistent direction — towards a trusted basket of reliable, long-term incentives that encourage investment and jobs in renewables for a growing economy of tomorrow. The Treasury has at least one easy win within grasp to inculcate that trust: section 12BA should be extended to 2027 to give South Africa’s renewable energy investments a chance to really shine.

Imraan Mukadam
Joburg

The FM welcomes concise letters from readers. They can be sent to fmmail@fm.co.za