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  1. Environment
  2. COP26
3 November 2021

South Africa given billions to end reliance on coal

Political will is as important as cash in moving the country towards clean energy.

By Martin Plaut

The South African government has welcomed the “historic” Cop26 pledge to provide the country with $8.5bn to move away from coal-driven electricity generation. It was a watershed moment, said President Cyril Ramaphosa, and will allow “a just transition to a low-carbon economy and a climate resilient society in South Africa”.

The commitment of the funds is just the first phase of financing, which will be spent through a variety of mechanisms, including grants, concessional loans and investments, and risk-sharing instruments, as well as in mobilising the private sector. 

Yet the deal is less than a third of the money that the head of Eskom – the state-owned electricity monopoly – was seeking. André de Ruyter came to the climate summit asking for $30bn.

Greenpeace Africa greeted the announcement, but warned that the money had to be carefully monitored to ensure that funds were indeed used for the transition from coal. The money should not be “looted by our unscrupulous rent-seekers” said Greenpeace Africa’s Thandile Chinyavanhu. 

Moving South African electricity supply away from coal is critically important. It is the 12th-largest emitter of greenhouse gases in the world, despite being only the 32nd-largest economy. Its reliance on coal has been criticised by scientists. Government policies were described as “insufficient” by Climate Action Tracker, which provides independent assessments of progress. 

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But the South Africa public’s attention has been elsewhere. Cop26 has been hardly mentioned on the busy chat shows that dominate the airwaves. The country is in the middle of local government elections. Campaigners from the Climate Justice Charter movement criticised all the major parties for being “oblivious” to these questions and failing to highlight them in their manifestos.

The elections have deprived the African National Congress (ANC) of majority support for the first time since it came to power in 1994. The party looks set to win the backing of less than 50 per cent of the population and lose control of a string of towns and cities.

The country has suffered from incessant power cuts, with Eskom unable to provide the electricity its growing population requires. Public frustration with this was an important contributor to the ANC’s loss of support. 

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But so too is the rate of unemployment, which is the highest in the world. More than a third of adults have no job. Finding a way of moving away from coal (which provides some 120,000 jobs) will be no easy task.

Until very recently, Eskom supplied over 90 per cent of all the country’s electricity. It was a virtual monopoly. In October this was ended. 

Some cities – including Johannesburg and Cape Town – are now considering alternative sources of supply. The question is whether President Ramaphosa will allow municipalities that may no longer fall under ANC control to have access to the newly pledged Cop26 funds, or whether he will insist that they are only used to transform Eskom.

[See also: Is Allegra Stratton right to be positive about India’s 2070 net zero target?]