S/Africa: Ramaphosa informs House of $8.5bn COP26 deal

South Africa's transition from coal to clean energy has kicked off with a multibillion-dollar aid which was subject to negotiations,…

South Africa’s transition from coal to clean energy has kicked off with a multibillion-dollar aid which was subject to negotiations, and “did not mean the country must accept any unfavourable terms,” President Cyril Ramaphosa has told Parliament in Cape Town.“This commitment from international partners does not mean we need to accept the offer as such, nor do we need to accept any unfavourable terms, especially if the financing arrangements could impact negatively on the public fiscus,” Ramaphosa said.

During the just-ended COP26 in Glasgow in Scotland, the country was the only African country to return home with a solid guarantee of US$8.5 billion in assistance from fossil-fuel power heavyweights in the name of the United States, Britain, Germany and the European Union (EU).

These countries had their billion-dollar investments in mind in this country when they decided to make this generous multibillion dollar aid to South Africa which heavily depended on coal to generate electricity to power the investments.

Ramaphosa told Parliament that “in terms of the political declaration, the USA, UK, Germany, France and the EU have offered this initial amount of US$ 8.5 billion to support South Africa’s just transition efforts.”

He added: “This support will take the form of various financial instruments, ranging from grants to concessional loans, at a lower interest rate. This funding will be mobilised over the next three to five years, with a view to longer-term engagement.”

The president said the offer by developed countries was an initial commitment, which might increase as discussions progress and further funds were identified. 

The president said the political declaration was in line with the obligation on the part of developed economies – as historical beneficiaries of high carbon emissions – to provide support to developing economies to transition to a lower-carbon future.

Economic Freedom Fighters (EFF) leader Julius Malema on Thursday had asked the president to provide the details of the terms and conditions of the US$8.5 billion loan that was announced by US president Joe Biden at the Climate Change Conference of the Parties 26 (COP26) in November.