South Africa will need over R1 trillion if it is to complete its transition to a green economy in the next 30 years.
The Presidential Climate Commission engaged the financial sector at the Johannesburg Stock Exchange on Tuesday to contextualise the importance of the sector in being central to financing South Africa’s climate change mitigation and adaptation plans.
Head of the Presidential Climate Finance Task Team Daniel Mminele says the country has secured US$8.5 billion in investment for the next five years to help mobilise the country’s transition to a green economy and a low carbon emission country.
Mminele says the funding comes from various European nations, various international stakeholders and businesses. He says his department is working with these partners to make sure the finance facilities are in line with what South Africa needs.
He says, “Of course the initial US$8.5 billion, this amount will have to be deployed in such a manner that it can crowd in further investments, especially from the private sector and constructing a precise investment pathway for South Africa’s energy transition, it will go a long way towards promoting ongoing investments.”
“And we are blessed in that South Africa’s development finance and private banking institutions are robust and well regulated. There is great potential in these channels of finance to be partners in the transition process to complement international climate finance flows,” says Mminele.
Presidential Climate Commission established holds first meeting of 2022:
The Presidential Climate Commission shared its detailed “Just Transition Framework” with the financial sector, which looks at how the country will need to shift its economic activities to work towards the country reaching net zero emissions by 2050.
The financial sector is an important stakeholder as it will be required to help finance this transition.
Executive Director at the PCC Dr Crispian Oliver stresses the importance of securing finance for the grid transition.
Oliver says, “One of the most important players in this transition is that we are going to help fund many of the components that we are talking about. In addition to building all of these new energy generation capacity, we have to fundamentally orient the grid itself, so that the grid is configured for a coal based power system and change it to a renewable base power system, which has got different areas, where the sun shines and the wind blows, very profound implications including for workers.”
Oliver also emphasised the importance of securing investments and funding as the green economy will have a negative impact on jobs.
“We have got roughly 80 000 coal miners, we have got 10 000 workers in Eskom coal fired power stations, we have three to four times that number in auto manufacturing and mechanics and petrol stations attendants. We like to focus on the coal transition and in fact the EV transition is actually more important when you look at the jobs impact of that transition and on the documents we say there are other sectors that we worry about that are at risk, the agricultural sector. We stand to wipe out the 300 000 jobs that we have in commercial agriculture.”
The PCC says the project will need all players in society to do their part. The country has little choice but to proceed with the Just Transition process. Already, we’ve seen the local impact of climate change in KwaZulu-Natal and elsewhere on the continent. And, trade patterns are set to change as import-receiving regions like the EU are set to impose penalties on goods that have a carbon footprint as soon as 2023 – which would make some exporters uncompetitive on the global stage.
The PCC in collaboration with the @JSE_Group will Financial Sector Consultative Forum on the Just Transition Framework.
Date: 26 April, 2022.
Join online: https://t.co/N2EDODifZ9
Online participants will be able to field questions & comments that will be raised in-person. pic.twitter.com/7DfUkr5DoD
— Presidential Climate Commission (@ClimateZA) April 25, 2022