South Africa Secures $676 Million Funding For Transition To Green Energy

South Africa has secured $676 million worth of funding from rich nations for its transition to green energy. The amount is twice as much as the originally set grant, which was only $329.7 million.

This comes as the country continues to seek billions of funding from Western nations

Rudi Dicks, head of the Project Management Office (PMO) at the Private Office of the President, said on Thursday that South Africa has been trying to get more than $12 billion from Western countries but in the form of gifts rather than loans.

"The president has made it very clear that he wants to see an increase in the grant component," Dicks said, as per Reuters.

He further shared that the country is expecting more grants the next month, as South Africa will be attending the 2023 United Nations Climate Change Conference, also known as COP28, which will be held in Dubai from Nov. 30 to Dec. 12.

Two years ago, Western countries like Britain, France, Germany, the European Union and the United States vowed to give $8.5 billion to South Africa. Other countries, including the Netherlands and Denmark, Canada, Spain and Switzerland also pledged huge figures this week.

It is worth noting that South Africa will have to pay back the total package amount with interest to the respective countries, aside from the amount that will be given as a gift.

Dicks further shared that South Africa believes it needs to work on its skills in various sectors, including solar generation, electric vehicles and green hydrogen. However, the country also needs to support the coal miners who will lose their jobs due to the transition.

The country is also trying to attract private investors in this transition project.

"The implementation plan will go for cabinet's approval by the end of October and will be presented at COP28," Dicks concluded.

South African Cabinet approved the implementation of the Green Hydrogen Commercialization Strategy (GHCS) on Thursday. Khumbudzo Ntshavheni, minister in the presidency, said this project would ensure South Africa becomes a major player in green hydrogen.

"Government has identified possible funding for green hydrogen projects and the draft Green Paper received extensive feedback from stakeholders," she said, according to SA News. "Green hydrogen has the potential to add additional renewable energy generation capacity and to support the local development of renewable energy."

Earlier this week, electricity minister Kgosientsho Ramokgopa claimed that Africa could produce 50 times more energy than required by 2040, adding that Sub-Saharan Africa's resources have the potential to generate between 5,000 to 13,000 million tons of green hydrogen energy every year.