/ 8 December 2023

US promises SA funds for climate change

Tea Plantation In South Africa
America has pledged $53 million for developing countries. (Photo by: Universal Archive/Universal Images Group via Getty Images)

The US has committed more than $53 million to support various developing cities, including Mbombela (Nelspruit) in South Africa, in their efforts to address climate change.

The US, participating in the US Climate Change Conference, which is taking place in Dubai, United Arab Emirates, until 12 December, said the funding, sourced from the private sector, is aimed at assisting developing nations to adapt to a changing climate.

In a statement, US Agency for International Development (USAid) Administrator Samantha Power said this was part of the US’ contribution towards helping developing cities in their quest towards clean energy.

“We must do more to tackle the climate crisis — and we are doing,” she said.

She added that the agency wants the funds to go towards actions such as decarbonisation, electric vehicles, making buildings carbon neutral, and solutions for energy efficiency. 

“This funding complements and expands USAid’s ongoing work to enable and empower local governments and vulnerable communities to realise their own resilient, low-carbon futures.” 

Among the cities set to benefit are Mbombela in Mpumalanga and Hermosillo and Merida in Mexico. Overall, the money will go to 23 cities in Asia, Africa, Latin America and the Caribbean, the statement said.

“This commitment resulted from collaboration with 21 companies that pledged financial support during the COP27 climate summit in Egypt last year,” Power added.

Mpumalanga is home to 12 of Eskom’s 15 coal-fired power stations, Sasol’s coal-to-liquids plant in Secunda and the NatRef refinery in Sasolburg. 

Weaning the region off coal is a cornerstone of the government’s transition plans. Still, Eskom has been criticised for not making the transition just and has admitted fault in how it shut down Komati Power Station in Mpumalanga, which has turned the area around it into a ghost town.

While Eskom said that none of its employees were affected by job losses because they were transferred to other power stations, many in the surrounding community lost their jobs and small and medium enterprises providing services to the station suffered, the Presidential Climate Commission found in its recommendation report.

The International Partners Group (IPG) has committed $8.5 billion in climate finance to support South Africa’s Just Energy Transition.

The $8.5 billion package was announced at the UN climate change conference, COP26, in Scotland in the UK in 2021. The IPG comprises France, Germany, the US and the EU. The group was expanded earlier this year to include Denmark and the Netherlands.

Last month, the IPG said that, overall, the grant financing from the expanded IPG has increased to $713 million, a 116% increase from the amount committed at COP26, to help the country in its quest for a ‘just’ transition

On Wednesday, at a South Africa session at COP28 summit in Dubai, Germany’s special envoy for the Just Energy Transition Partnership Rainer Baake, shared insights gained by Germany as a member of the IPG.

Baake said delaying decommissioning coal-fired power stations would not contribute to South Africa’s energy security goals. Instead, he urged the country to implement large-scale renewable energy projects swiftly, emphasising the need for significant investment in the renewable energy sector.

Echoing the World Bank’s perspective, Baake said South Africa has the potential to lead a green industrialisation initiative that could bolster economic performance, generate employment and drive decarbonisation.

“The recently launched Just Energy Transition Implementation Plan emphasises the importance of conducting the transition at a pace, scale and cost that align with societal and economic capacities,” Baake said.

The funds come as the South African delegation asks for more money to support its ambitions towards cleaner energy.

A report from the Presidential Climate Commission released last month suggested that South Africa must significantly boost its climate financing to achieve its 2030 climate targets.

The report found that public and private climate investments must rise three to five times beyond the current yearly average of R131 billion to achieve its net zero goal by 2050.

“Approximately R334 billion annually is required while meeting the climate objectives outlined in the 2016 Paris agreement demands an annual investment of R535 billion,” it said.