South Africa may be able to raise as much as R1.13 trillion ($60 billion) over the next five years to fund a switch to green energy from fossil fuels, its environment minister said.
The amount is still short of the R1.5 trillion the country has estimated it will need for the task, Barbara Creecy said in a response to a parliamentary question posted on a government website.
“This will need to be mobilized from various public and private sources such as multilateral development banks, international partner countries, private investors, philanthropies and the fiscus,” she said.
South Africa, which has the continent’s most industrialized economy, is the world’s 14th-biggest source of climate warming greenhouse gases.
In 2021, it won an $8.5 billion pledge from some of the world’s richest nations to help the country transition away from the use of coal, which is used to generate more than 80% of South Africa’s electricity.
Most of the finance is expected to come from private investors, Creecy said in her response.
The government has eased regulations to allow businesses to generate their own electricity as state power utility Eskom doesn’t have the money to expand, and regular breakdowns of its poorly maintained plants subject the country to frequent blackouts.
Possible sources of funding, according to Creecy:
- $8.5 billion, or about R160 billion, from France, Germany, the UK, the US and the European Union under the so-called Just Energy Transition Partnership
- $3.5 billion, or about R66 billion, pledged by Spain, the Netherlands and Denmark
- Potential investment of R500-700 billion by South Africa’s private sector, mainly in new generations
- R200 billion in financing from multilateral development banks and local and international development finance institutions