$11 billion green energy plan in the works

16 Sep 2019

natureSouth Africa is working on the implementation of the world’s largest green-energy financing plan, Bloomberg reports.

Meridian Economics, a Cape Town-based think tank, is responsible for the plan – which is now being contemplated upon by the government.

The initiative would consist of an $11 billion facility backed by development finance institutions and private funders and would lend money to Eskom for lower than commercial rates, if Eskom hurries the process of embracing renewable energy and closes coal plants hazardous to the environment.

A further 10 gigawatts of renewable-energy production would be added over the course of a decade, which would enable South Africa to reduce its potential carbon dioxide emissions by 715 million metric tons by the year of 2050.

If implemented, it would form part of South Africa’s efforts directed towards reducing its environmental footprint. Currently, the government is working hard to stick to a commitment made in 2009, when it pledged to decrease emissions by 42% by 2025.  

When speaking at an interview, Emily Tyler, a climate economist at Meridian, said: “This would be the largest and most significant global climate finance transaction to date. It would propel South Africa to a cleaner and more resilient energy future.”

Eskom is responsible for supplying an average 95% of South Africa’s power and following its build-up of 450 billion rand of debt, it has requested help from the government. The new plan would allow it to loan money over the course of five years and repay them over 20, as well as create new jobs and encourage development.

Tyler also revealed that several large development finance institutions, climate funds and philanthropic organizations have shown to be interested in contributing to the initiative. However, the plan is still in its early stages and will require more time to be finalised.