President Cyril Ramaphosa
TFor South Africa to meet its decarbonisation commitments by 2050, it will need $98 billion (R1.7 trillion) in a five-year Just Energy Transition Investment Plan for 2023-2027, President Cyril Ramaphosa has said.
Speaking at a climate resilience symposium in Pretoria on Monday, President Ramaphosa said the plan would encourage huge investment in the electricity grid, electric vehicles, economic diversification and skills development.
The Just Energy Transition Implementation Plan, approved by Cabinet last year, will guide South Africa's transition to a low-carbon economy through the expansion of renewable energy sources and reducing reliance on coal.
The President said climate change is an economic issue as well as a science, human rights and development issue, as it has direct and substantial effects on the entire economy.
“Climate disruption will increase business costs, undermine competitiveness and weaken prospects for job growth, resulting in lower tax revenues and increased disaster relief spending,” President Ramaphosa said.
The Treasury Department, in collaboration with the Presidential Climate Commission, will launch a Just Transition Financing Mechanism report at a three-day symposium, which will outline how to finance and finance the energy transition.
“Climate finance is also crucial to our transition. Significant investments are needed to build sustainable infrastructure, develop green technologies and support social programmes,” President Ramaphosa said.
According to the African Development Bank, Just Transition Finance is different from Climate Finance, which is concerned with financing climate action, i.e. measures taken to combat climate change, taking into account the goal of leaving no one behind, and is not specifically designed to finance the impacts of decarbonization activities on vulnerable workers and communities.
A Just Transition finance approach should explore opportunities to link green assets that help reduce energy, water and natural resource use with positive social outcomes and impacts on workers and communities.
The President announced that a Just Energy Transition Finance Platform will be launched in the coming months.
According to the implementation plan, the purpose of the platform is to act as an intermediary between grant providers and potential beneficiaries, assist project initiators in preparing their plans and applying for grants, and provide the public with transparent data and analysis on the allocation of grant funds to projects.
The President said the financing platform would be an important precursor to a broader just transition financing mechanism.
“I call on South African businesses to invest in projects that are needed to ensure a successful just transition in the country,” President Ramaphosa said.
