- Cabinet has endorsed the investment plan for $8.5 billion to help South Africa meet its climate commitments.
- The funding will broadly support the decarbonisation of the electricity sector and the development of electric vehicles and green hydrogen.
- The plan will be presented at COP27 in Egypt next month; thereafter, it will be released for public comment.
Cabinet has endorsed the investment plan for $8.5 billion (~R155 billion) that will be used to support a just energy transition.
In a statement issued on Thursday, Cabinet said that it had received presentations from the Just Energy Transition Partnership (JETP) - comprising international partners the UK, US, France, Germany and EU, as well as South Africa.
"Cabinet endorsed the JETP-IP [JETP Investment Plan] and expressed its appreciation of the detailed work undertaken to develop it," the statement read.
The international partners had pledged $8.5 billion at the UN climate change conference COP26 in Glasgow, Scotland, last year. Over the past few months, the Presidential Climate Finance Task Team, led by former deputy reserve bank governor Daniel Mminele, has been working to iron out details of the offer to ensure it does not worsen South Africa's fiscal position.
Commenting on the offer, Forestry, Fisheries and Environment Minister Barbara Creecy, speaking at Standard Bank's climate summit this week, said it was critical to ensure that any deal would not increase "sovereign indebtedness". She added that the investment plan was developed in parallel with the work of the Presidential Climate Finance Task Team.
The aim is to present this plan at COP27, which will be held in Sharm el-Sheikh, Egypt, next month.
The funds are a combination of concessional loans and grants and will be directed towards Eskom as it repurposes coal-fired power stations and bolsters the grid to be able to support new renewable energy projects and develop the green hydrogen and electric vehicle sectors.
"The investment plan, once launched at COP27, will be released for public comment this year. We are urging that you would look at it, understand it, and see how it lays out the vision for ways we want to support the transition for these three sectors," Creecy shared.
Creecy said that estimates indicate that over the next eight years, about R1 trillion in investment is needed to effect the transition.
In its statement, Cabinet noted that the JETP investment plan outlines the funding required to achieve the decarbonisation commitment by South Africa while also ensuring a just transition for affected workers and communities.
The inter-ministerial committee on climate change will hold a media briefing providing more details.