President Cyril Ramaphosa delivers his keynote address at the official opening of the 2024 National Treasury Climate Resilience Symposium in Pretoria. Photo: GCIS
President Cyril Ramaphosa has called on South Africa’s global partners to accelerate honouring their commitments made towards helping the country’s drive toward the Just Energy Transition (JET), saying the mitigation and adaptation challenges faced were an uphill battle.
Threaded a thin line between exercising the country’s sovereignty to not abruptly stop the use of fossil fuels, Ramaphosa yesterday reiterated that South Africa would decarbonise at a pace and scale affordable to it or risk damaging a huge part of the economy without proper alternatives in energy and industrial capacity.
Speaking at the 2024 National Treasury Climate Resilience Symposium, Ramaphosa said though there had been progress with the establishment of the Green Climate Fund, the Loss and Damage Fund, and other global mechanisms, there was need for a quicker indication of the pledges.
“They often stand at great platforms in the world and make pronouncements on commitments and we in the global south who suffer the most from climate change – most of which originates from those developed economies that cause a greater part of the climate change that we are suffering,” he said.
“But they never fulfil and follow up on their commitments and when they do, they do so either late or and they do so on very complicated measures. We call on them to live up to the commitments they continue to make,” the president said.
South Africa has a prospective funding pool of $11.8 billion (R212bn) from JET Partnership pledges made at at the COP26 climate negotiations in Glasgow, Scotland, where the collective comprising France, the European Union, the United Kingdom, and the United States pledged R131bn ($8.5bn) in loans and grants, with later pledges by Denmark, the Netherlands and Spain.
Speaking at the same event, US ambassador to South Africa, Reuben E Brigety II, said his country had pledged $1bn in loan guarantees to the private sector for transition oriented projects.
The World Bank Group country director for South Africa Satu Kahkonen warned that if not properly mitigated with people as the focus, the energy transition could drive almost 1 million South Africans into poverty by 2030.
Kahkonen said at the same time, for each job eliminated in the transition, two to three new jobs could be created by 2050.
However, he said that since the new jobs won’t emerge immediately in the same sector or locations, public-private interventions will be necessary to equip people with new skills.
“The cost of the transition will be high, it will be at least $500bn by 2050, of which $140bn is needed by 2030, therefore financing for international command mobilisation of private capital will be vital,” Kahkonen said.
Deputy Finance Minister David Masondo said the government would in March, 2026 introduce an investment allowance to boost local electric vehicle production.
Masondo said in terms of this allowance, the producers can claim 15% of qualifying investment spending on production capacity for electric and hydrogen-powered vehicles in the first year.
He said on service cost-reduction the government was prioritising capital budgets with a 7.3% increase in capital investment over the medium term to support projects that enhance climate resilience.
“It is imperative that climate financing facilities are either denominated in local currency or provided in foreign currency that should be deeply concessional, that is with lower interest rates and provide for a grace period that is a longer period in capital repayments,” Masondo said.
“Additionally, the financing should be aligned with a country’s specific needs and priority areas and not hinder the ability to address climate challenges through imposing difficult conditionalities,” the deputy minister said.
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