The U.S. Secretary of the Treasury Janet Yellen has said that the country will help mobilize financing from the private sector to assist South Africa which is heavily dependent on coal.
Yellen, who made this known on Friday during a visit to South Africa, said that the US has always supported South Africa’s transition to cleaner energy.
Currently, coal is by far the major energy source for South Africa, accounting for around 80 per cent of the country’s energy mix. The country is also the world’s fifth-largest coal exporter.
However, the country is going through a major energy crisis with daily rolling power cuts, which cripple the economy, as state firm Eskom has failed to boost generation capacity to keep pace with growing demand in recent years.
The South African government had recently started to push for more renewable power generation.
The U.S., the UK, France, Germany, and the EU are mobilizing an initial $8.5 billion to catalyze the first phase of South Africa’s Just Energy Transition (JET) Investment Plan, as part of a long-term Just Energy Transition Partnership (JETP) signed in 2021.
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“The financial package of $8.5 billion is a substantial down payment. Importantly, it is designed to mobilize additional money from the private sector and philanthropies, and I will meet with representatives from both groups later today,” Secretary Yellen said in a speech today.
“We fully recognize that transitioning the local economy and the economy of South Africa to clean energy will not be without challenges,”. “But the investments that our governments and the private sector will make over the coming years in the wind, solar, battery storage, and non-energy infrastructure will pay dividends in terms of well-paying jobs and a growing and cleaner economy.”
With the just transition plan, South Africa will invest in job retraining and reskilling, cash payments to support displaced workers while they find new employment, and redevelopment of former coal mines and coal power plants as clean energy production sites and other productive uses.
Story was adapted from Oil price.
