South Africa had asked the US, UK, France, Germany and the EU to consider further funding for the country’s climate goals to take the form of grants as opposed to loans, a query that was “well received,” President Cyril Ramaphosa said.
Lameez Omarjee – News24 Climate Editor
The president was speaking at a press briefing at COP27, Sharm El-Sheikh, Egypt. He had delivered the national address earlier, where he reiterated calls for developed nations to honour their commitments of financial support to developing economies to respond to the climate crisis.
Ahead of COP27, South Africa publicly released its R1.5 trillion just energy transition investment plan for the next five years. The plan was formally handed over to the International Partners Group on Monday – the group includes the US, UK, France, Germany and the EU. The investment plan builds on their $8.5 billion pledge at COP26 in Glasgow last year.
But Ramaphosa told journalists that the grant component was quite low, at 2.7%. The rest comprised concessional loans and loans from commercial institutions.
He explained that South Africa told the partners that the country required R1.5 trillion.
“We have communicated this to our partners and said because South Africa carries a sizable loan burden, which it has to service from its fiscus, we require more grant funding,” Ramaphosa said.
“Fortunately, that message seems to have been well received,” he added.
South Africa’s debt burden is projected to be around R4.7 trillion this year, a significant increase from the R577 billion in 2007/08.
Apart from the $8.5 billion, some of the IPGs have committed additional resources of around R10 billion – which comprises concessional finance and grants.
Ramaphosa said the Just Energy Transition Partnership is “historic” and could be a model to be improved or scaled up for other developing nations.
Similarly, European Commission President, Ursula von der Leyen, described the Just Energy Transition Partnership as a “first of its kind global initiative”.
“It is a flagship of EU-supported multilateral cooperation to limit global warming to 1.5°C.”
These views were echoed by France’s President Emmanuel Macron, who described it as a “benchmark”, and US Secretary of the Treasury Janet Yellen, who said it was a “groundbreaking” model to tackle the climate crisis.
Ramaphosa told journalists that, so far, South Africa has had a “good experience” at COP27, which kicked off on Sunday.
COP27 has been dubbed the “African COP”, where developing nations will be pushing for more finance to enable them to respond to the climate crisis adequately, without worsening their debt burdens.