South African power producers will benefit from a €400 million loan, notably from the European Investment Bank (EIB), to develop renewable energy in this highly coal-dependent country. An agreement to this effect was signed between the EIB and the Public Development Bank of Southern Africa (DBSA) during COP27 in Sharm el-Sheikh, Egypt, these institutions announced in a press release on Friday. The EIB will contribute 200 million euros (206 million dollars), and the DBSA and the Green Climate Fund (GCF) each 100 million euros.
At least $500 billion in aid is needed to reach carbon neutrality by 2050
South Africa is one of the twelve most polluting countries in the world, with around 80% of its electricity produced from coal. The amount released by the EIB is the largest ever invested in South Africa, according to the EIB. The solar and wind energy projects to be supported by the EIB should prevent the emission of 3.6 million tonnes of CO2 into the air and create hundreds of jobs, according to the EIB.
On Wednesday, France and Germany announced that they would release a first envelope of 600 million euros for aid for the energy transition in South Africa. The country will need at least $500 billion in aid to achieve carbon neutrality by 2050, according to the World Bank. Indebted South African public utility Eskom can’t produce enough electricity with aging facilities and imposes continual cuts.
The countries of the South will need more than 2 trillion dollars a year by 2030 to finance their climate action, almost half of which will come from external investors, according to a report commissioned by the COP presidency.
Source: BFM TV
