The government of president Cyril Ramaphosa is pushing to renegotiate a deal with Climate Investment Funds, a group tied to the World Bank. — Bloomberg
JOHANNESBURG: South Africa is seeking to alter the terms of a landmark agreement under which it promised to cut its reliance on coal in exchange for access to financing.
The government of president Cyril Ramaphosa is pushing to renegotiate a deal with Climate Investment Funds (CIF), a group tied to the World Bank, so that it won’t be required to close three coal-fired power plants in the coming years.
The plants, owned and operated by Eskom Holdings SOC Ltd, are among the country’s biggest polluters, according to government advisers.
South Africa’s government is seeking an “adjusted approach to the programme with the decommissioning date for three power stations” moved to the end of March 2030, the department overseeing the project in the president’s office told Bloomberg.
The decision is motivated by “energy security concerns,” the department said, adding that South Africa is still working to reduce its emissions.
The development has the potential to affect a total of roughly US$2.6bil in financing from multilateral development banks and other sources.
The first tranche would be a US$500mil disbursement from CIF’s Accelerating Coal Transition programme.
The funds, which are tied to the country’s commitment to weaning itself off the world’s dirtiest fossil fuel, are part of a larger US$9.3bil climate pact.
The failure of a G20 nation to live up to its commitments around coal power would represent a blow to a US$40bil programme known as the Just Energy Transition Partnership (JETP), under which South Africa’s agreement was struck. As the first JETP nation, South Africa’s retreat from the original terms of its agreement would raise questions around its credibility. — Bloomberg
