Durban – Although receiving pledges of support from Western nations, South Africa’s green plan to transition from coal to renewable energy may need more than $30 billion (about R550bn) to complete, Reuters Business reported.
Sources close to the plan revealed that the plan will cost around $46.5bn (about R853bn), more than five times the $8.5bn pledged to SA over the next three to five years, at the UN Climate Change Conference in November.
These figures could change given the fluctuations in market conditions as well as amendments to the original agreement.
Authorities are forging ahead to sign the deal before the UN Climate Talk in Egypt next month.
The deal includes the US, EU, UK, France and Germany and entails South Africa pushing away from coal as a resource quicker than it initially planned.
According to President Cyril Ramaphosa, the plan could serve as a model for other developing nations.
It is not clear where the deficit of the funds will come from, but speculation is pointing towards private sector funding.
The African Development Bank was also reported saying that they would “explore concessional financing options” to support the plan.
“We look forward to a long-term partnership that can serve as an appropriate model of support for climate action from developed to developing countries,” Ramaphosa said at COP21 in Glasgow.
South Africa still heavily relies on coal as a power source, with around 90% of electricity coming from coal plants.
But coal remains one of the major power sources for Germany and the US, accounting for more than 20% in both nations.
Much of the coal exported to European nations is mined in South Africa.
Despite the West pushing for SA to jump from coal to renewable energy, new companies like Thungela Resources have shot up exponentially in value over the past two years, since global demands have increased.
In June 2021 TGA (Thungela), listed on the JSE for around R20 a share.
As at Monday, TGA shares are worth R304, proving coal is still a hot commodity.
But South Africa’s ageing and poorly maintained coal plants have also been the cause of arguably one of the biggest obstacles to economic growth: load shedding.
As at Sunday afternoon, Eskom said that load shedding would be pushed to stage 4 from 12pm on Sunday to 5am on Monday (October 24), and would continue at various stages for the rest of the week.
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