South Africa Gets $676 Million Grants From Rich Nations For Energy Transition

South Africa has secured $676 million in grants from wealthy nations to support its transition to green energy.

The amount exceeds the initial commitment made by these countries, although it is still a fraction of the total funding package, the rest of which South Africa will have to repay with interest.

On Thursday, Rudi Dicks, the head of project management in the presidency explained that South Africa has been advocating for a larger portion of the $12 billion currently extended by Western nations to be in the form of grants rather than loans.

Initially, the grant was set at $329.7 million. However, Dicks stated that “The president has made it very clear that he wants to see an increase in the grant component.”

However, the South African government estimates that the complete transition from carbon-intensive coal, which currently accounts for 80% of the country’s power generation and is used to produce a third of its liquid fuel, will cost 1.5 trillion rand ($78.44 billion).

Dicks mentioned that South Africa is currently engaged in negotiations to expand both the overall funding package and the portion dedicated to grants during the climate talks.

He added that more grants could come in as the country heads to COP28 climate talks in Dubai next month, Reuters reported.

At the climate talks two years ago, the United Kingdom, France, Germany, the European Union, and the United States committed $8.5 billion to the initiative.

This figure has increased since then, with the recent inclusion of the Netherlands, Denmark, Canada, Spain, and Switzerland in the initiative this week.

In these discussions, South Africa will give a comprehensive plans detailing how it intends to allocate and utilize the funds.

South Africa says it needs to develop skills in sectors like solar generation, electric vehicles and green hydrogen.

Moreover, they aim to provide support for coal miners facing job losses and create incentives for private-sector investment in projects that may yield lower returns.


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 of October and will be presented at COP28,” Dicks said.

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