South Africa's climate grant funding from rich nations doubles to $676m

South Africa has secured $676m (R12.89bn) in grants from rich nations for a transition to green energy, more than double what they initially promised but still only a fraction of the total package, the rest of which it will have to repay with interest.

Rudi Dicks, head of project management in the Presidency, told Reuters on Thursday that SA had been pushing for more of the $12bn (R228.87bn) currently on offer from Western nations to take the form of gifts rather than loans.

The grant had initially been set at $329.7m (R6.29bn).

“The president has made it very clear that he wants to see an increase in the grant component,” he said, adding that more grants could come in as the country heads to COP28 climate talks in Dubai next month.

The UK, France, Germany, the EU and US pledged $8.5bn (R162.12bn) at the climate talks two years ago, a figure which has since gone up as the Netherlands and Denmark, Canada, Spain and Switzerland joined the initiative this week.

But South African authorities estimate the total cost of SA's transition from carbon-intensive coal — which generates 80% of its power and is used to synthesise a third of its liquid fuel — at R1.5-trillion.

Dicks added that SA was in negotiations to possibly increase both the total package and the share taken up by grants at the talks, in which SA will present details on how it plans to spend the money.

SA says its needs to develop skills in sectors like solar generation, electric vehicles and green hydrogen, assist coal miners losing their jobs and attract the private sector to invest in what it says are lower return projects.

It aims to retire coal plants, ramp up renewable capacity and establish a green hydrogen export hub, among other things.

“The implementation plan will go for cabinet's approval by end-October and will be presented at COP28,” Dicks said.

Reuters