South Africa and the rest of Africa should not be forced into abandoning fossil fuels at the behest of wealthier nations while they transition to renewable energy.
This is according to Standard Bank CEO Sim Tshabalala, who said during a session at the BRICS Business Forum earlier this week that Africa’s climate choices must be respected as the continent has the right to use the fossil fuels at its disposal.
Tshabalala also called on the transition to renewable energy to be fairer and for compensation to feature in future global climate discussions.
The continent has several large carbon sinks that take more carbon out of the atmosphere than it emits.
Tshabalala said this is a service for which the rest of the world should pay Africa.
“We also need to insist on the right of African nations to use resources to mitigate and adapt to climate change, including by using fossil fuels,” Tshabalala said.
“We recognise the need for us to mitigate and adapt, but we insist this has to be done in a fair and equitable way for the people of South Africa and the rest of Africa.”
The CEO of Africa’s largest bank said the institution recognises that the world is warming and carbon emissions have increased rapidly since the beginning of the 20th century.
“There is no question if you look at the reports from the Intergovernmental Panel on Climate Change that the science is saying the environment is changing and getting warmer.”
“But it is imperative, on the basis of the Paris Agreement, for us as Africans to insist on differentiated but common commitments that will give effect to a just transition,” Tshabalala said.
Standard Bank said in its results presentation for the six months to the end of June 2023 that it is paying particular attention to sustainable finance.
The bank has mobilised R83 billion in sustainable finance solutions since 2021, and its asset management company, Stanlib, raised R13 billion for a sustainable infrastructure fund.
Africa’s largest bank disbursed R1.1 billion to businesses for installing alternative energy sources and to solar solutions providers directly.
This puts the bank on track to reach its target of financing over R250 billion by the end of 2026. Standard Bank’s Corporate and Investment Banking (CIB) will conduct most of this lending.
CEO of Standard Bank’s CIB division Kenny Fihla said that the bank is seeing increased demand for funding from renewable projects across the continent.
Fihla said the company is seeing increased demand for renewable projects ranging from government-run Independent Power Producer projects to off-grid private sector projects.
Standard Bank’s renewable projects financing has risen with demand to over four times greater than the bank’s funding of non-renewable energy projects.
The bank set an initial target of financing R55 billion worth of renewable energy projects in Africa within two years from 2021. This target was reached in less than one year.
Standard Bank aims to finance R50 billion in renewable projects in the current financial year.
Fihla said most projects are in South Africa, with the bank starting to see demand pick up in Namibia, Kenya, and Nigeria.