South Africa may be able to raise as much as 1.13 trillion rand ($60 billion) over the next five years to fund a switch to green energy from fossil fuels, its environment minister said.
The amount is still short of the 1.5 trillion rand the country has estimated it will need for the task, Barbara Creecy said in a response to a parliamentary question posted on a government website.
“This will need to be mobilized from various public and private sources such as multilateral development banks, international partner countries, private investors, philanthropies and the fiscus,” she said.
South Africa, which has the continent’s most industrialized economy, is the world’s 14th-biggest source of climate warming greenhouse gases.
In 2021, it won an $8.5 billion pledge from some of the world’s richest nations to help the country transition away from the use of coal, which is used to generate more than 80% of South Africa’s electricity.
Most of the finance is expected to come from private investors, Creecy said in her response. The government has eased regulations to allow businesses to generate their own electricity as state power utility Eskom Holdings doesn’t have the money to expand and regular breakdowns of its poorly maintained plants subject the country to frequent blackouts.
Creecy pointed to possible sources of funding including:
- $8.5 billion, or about 160 billion rand, from France, Germany, the UK, US and European Union under the so-called Just Energy Transition Partnership
- $3.5 billion, or about 66 billion rand, pledged by Spain, the Netherlands and Denmark
- Potential investment of 500-700 billion rand by South Africa’s private sector, mainly in new generation
- As much as 200 billion rand in financing from multilateral development banks and local and international development finance institutions
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