The completion of South Africa’s government’s energy transition implementation plan will take another two to three months, further delaying the flow of funding from a $8.5 billion climate finance pact with some of the richest nations in the world.
As coal-fired plants gradually shut down, more needs to be done to reskill employees from communities dependent on coal, according to Joanne Yawitch, head of the project management unit for the pact under the South African presidency.
Yawitch, who spoke on Tuesday at a Presidential Climate Commission event in Johannesburg, claimed that the government’s decision to restrict the amount of new loans and debt guarantees that state utility Eskom Holdings SOC Ltd. could accept had complicated matters.
“There are significant challenges on loan finance,” she said. That moratorium “impacts on what was in the investment plan,” she said.
The financial support to assist South Africa in moving away from coal, the source of more than 80% of South Africa’s power at the moment, was provided by France, Germany, the US, UK, and the European Union.
Political squabbling and pressure from companies that benefit from the usage of coal have plagued the so-called Just Energy Transition Partnership, a model for accords with Indonesia and Vietnam.
Prior to this, the administration had stated that the implementation plan will be completed in March and then again in August.
Under the work done so far the Presidential Climate Commission has recommended that the government’s Development Bank of Southern Africa be appointed to run the Just Transition Financing Mechanism. The DBSA would oversee the allocation of funds to energy transition projects.
An initial investment plan drawn up by the commission estimated that South Africa will need 1.5 trillion rand over five years to begin transitioning its economy away from coal.