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Rich nations pitch climate aid to fund SA coal exit

The discussions with SA include representatives from the US, UK, Germany, France and the European Union.
Image: Waldo Swiegers/Bloomberg

Envoys from some of the world’s richest nations met with South African cabinet ministers on Tuesday to discuss a climate deal that could see billions of dollars put toward ending the country’s dependence on coal.

The delegation is trying to hammer out an agreement that can be announced at the COP26 climate talks, which start in Glasgow, Scotland on October 31, two people familiar with the talks said. The discussions with South Africa — the world’s 12th-biggest emitter of greenhouse gases — include representatives from the US, UK, Germany, France and the European Union.

While South Africa is under pressure to cut its dependence on coal – which accounts for more than 80% of its power generation – it needs finance to facilitate the transition to cleaner energy. Developed nations may also need to find away to address the challenges faced by South Africa’s state-owned power utility, which is burdened by R400 billion of debt.

The envoys met Tuesday with South African ministers including Pravin Gordhan, the public enterprises minister whose portfolio includes oversight of power utility Eskom, Barbara Creecy, the environment minister, and Ebrahim Patel, the country’s trade and industry minister, the people said, asking not to be identified as a public announcement has yet to be made. Talks will be held on Wednesday with South Africa’s politically powerful labour unions, business leaders and the Presidential Climate Change Coordinating Commission, three people familiar with the arrangements said.

The South African ministers pressed for details on what finance was available, but the envoys favor an incremental approach and more commitments from South Africa, the people said. While Gordhan urged support for Eskom, other options such as transitioning South Africa and its car industry toward electric vehicles were also discussed, they said.

Albi Modise, a spokesman for the environment ministry, confirmed that a group of ministers met with the envoys but declined to comment further, saying a statement will be issued later.

Richard Mantu, spokesman for public enterprises, referred queries to Modise, and Tyrone Seale, acting spokesman for the South African presidency, said he couldn’t comment immediately. South Africa’s National Treasury didn’t immediately respond to a request for comment.

Some senior members of South Africa’s government are pushing hard for climate mitigation measures. President Cyril Ramaphosa chairs the climate commission he created last year and its more ambitious emissions reduction target was adopted by cabinet this month. Creecy has said developed countries need to boost energy-transition and climate-adaptation funding to developing nations.

“South Africa is well positioned to obtain concessional finance both for the country-wide climate transition and the electricity transition in particular,” Gordhan said in a response to queries before the meeting.

Still, the pivot from coal faces opposition within South Africa. Gwede Mantashe, the country’s energy minister, has advocated for the construction of new coal-fired power stations. Mantashe, the former head of the National Union of Mineworkers, is the politically influential chairman of the ruling African National Congress.

The move to reduce South Africa’s reliance on coal comes as Chinese demand pushes prices toward record highs. The dirtiest fossil fuel, which was struggling against cleaner energy sources, is now seeing its biggest comeback ever, complicating international climate talks set to begin in just a few weeks.

© 2021 Bloomberg

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Ahhh how gracious of them..

they provide loans so that you can buy their “green tech”

Brilliant

I agree, but also it would be nice to have less pollution. There are benefits for SA’ns here too.

Really, what economic and employment benefits in a country which has shown negative growth for the past five years, and an unemployment rate anywhere between 34 and 44% depending upon who you can believe.

Wow so negative. SA had a factory for making windturbine blades and for assembly of solar panels. They closed down when the renewable projects were stopped for a long time from 2016 on by JZ and corrupt comrats, as they were trying their best with the Rosatom nuclear deal. REIPP BW 5 was delayed enormously. Can’t believe the COP climate envoys from these 1st world countries being so eager and naive to score brownie points with this SA loan in their big gathering, as I fear giving the money to this rotten, corrupt ANC government will hardly be used for the intended purpose.
Had SA state and Eskom not been in triple junk territory, they could have easily afforded the expenses or concluded a loan for it from regular lenders. All renewable generation can be funded and built by private companies. Eskom just needs funds for expanding, improvement of the grid.
BTW, would be nice if the functionality of the comments section could be improved further, for example if you could change your vote, and edit comments later.
Just wrongly down voted JB’s comment.
Geologist/ energy expert Clyde Mallinson, and economist/ energy expert Grove Steyn both are now advocating for 5-6 Gw of new renewables to come online annually.
https://www.engineeringnews.co.za/article/just-transition-transaction-can-unlock-fiscal-space-for-south-africas-low-carbon-shift-2021-09-28
Would be very nice if the overseas climate envoys could also talk to INDEPENDENT energy experts mentioned above, incl Chris Yelland and Anton Eberhard.

All these renewable green catch phrases sound so warm and fuzzy, and sound like a good thing, unfortunately ‘green’ energy is not good on an industrial scale. Watch the documentary ‘The Human Planet’.
In theory practice and theory are the same, in practice they are not.

Let’s just get Medupi and Khusile up and running before we go down another rabbit hole of incomplete projects.

And Germany sighing relief as Nord Stream 2 is finished, taps turned on and aggressive US sanctions to persuade EU nations to buy US shale gas

UK has domestic gas conundrums as well as North Sea wind turbines failing as does The Netherlands

Interesting times should manufacturing demands become bottlenecked by the Greens

Seems that the big boy US sanctions and tantrums did not work in Europe.

Europe , Russia , China , South Africa are exceptional also Mr. Trump

Just talk talk, no action, we will just burn some more Coal until they come to the party.

Our smoke will move upwards to the Northern side (EU, US, UK).

Trump did -100% for Africa and Biden does not even know that we exist on the map.

Sounds like both parties are trying to blackmail the other. Its a pity South Africa can’t just build things anymore.

Western governments are No Different from the Chinese, they see a third world country run by Ignorant Idiots and they jump on the bandwagon to abuse the situation and Exploit the Gross Ignorance and Incompetence.

The US, EU and UK has applied undeclared sanctions on South Africa.

It has been a one way highway of outflows of money out of South Africa, no support or investment interest shown in the last twenty years.

So who cares about clean energy now? we will use what we have.

LOL — that alone will not stop coal mining for export !!
Unlikely to sway the Unions who have a vested interest in the mining and burning of coal.
Good luck is more than 20% of funds end up for what is intended.

The whole country should have a Vested interest in mining and burning Coal, it is one of the biggest direct and indirect employers in the country, not to mention the GDP and Forex benefits it brings.

yep – coal is one of our natural competitive advantages in SA. And now they want to take that away from us. Next they’ll tell us we can’t mine platinum or gold either.

Coal will not go away so fast, not even in ten or twenty years.

Look at the clean energy prices like Gas, up 250% since January 2021

And the coupon on these ‘loans’?

The US,UK and EU are like mashonisas (township loan sharks). They give you money and you pay interest forever!

A few months ago the US, UK and EU didn’t want to share their vaccines with Africa. We know what they are!

Are the Chinese and Russians better with their “assistance” ?

Well if you do not pay the principal back that is how it works, you pay interest forever. Maybe before making stupid comments on a website that is called Moneyweb you need to at least make sure you have some basic knowledge of how money works.

Thank you for explaining it to me. You clearly are a genius.

Thank you for explaining it to me. You clearly are a genius.

My comment may have come across more condescending than I intended and let me rather more coherently communicate my position. My point is that the west is not forcing lower income countries to run budget deficits and they are in the right to negotiate any financing to their advantage. This is how most bilateral agreements work, the party with the advantage will always negotiate favourable terms for themselves. If the tables were turned around lower income countries would do the same, as they do with the bilateral agreements they make between each other.

Many low income countries have paid interest payments for a long time and never actually settled the principal of the loans they entered into. In my opinion the lenders are entitled to get interest payments as long as the principal is outstanding.

The issue is that lower income countries should rather move towards running budget surpluses and cut reliance for finance from the developed economies.

I may not support you general views about other things, but in this case you are so absolutely correct.

SA was just horribly slow, and relaxed in getting the vaccines. They thought they would get them for free or very little from the Covax initiative, meant for poorer countries. Rich countries knew they had to stand up for themselves, and show foresight. They got wealthy,because they worked harder, but most of all smarter. Got themselves better organised. Did not tolerate ignorance, incompetence and corruption as easily, and spinelessly as here in sunny, beautiful Africa.
Africa must pull itself out of poverty and misery, and stop blaming, finger pointing other countries. And producing the begging bowl.

The US,UK and EU are like mashonisas (township loan sharks). They give you money and you pay interest forever!

A few months ago the US, UK and EU didn’t want to share their vaccines with Africa. We know what they are!

Start the discussion with the envoys with a question to them about paying back the money they owe the world for building their economies at the cost of the environment.

It should be fairly simple to work out a carbon tax on the last 100 years of their GDP. The money can be deposited in a fund that then puts up low interest loans for green energy projects – 1% cost of debt would make a heck of a lot of a difference.

They can simply issue a bond at negative coupon to finance a green Special Purpouse Vehicle that buys every local coal mine at the current market cap with the aim of shutting it down.

This is how nations ended slavery. The UK paid back their last slave bonds only recently. They purchased slaves across the Commonwealth for R350 000 per slave at the current purchasing power as part of the process to abolish slavery. A similar process can abolish the carbon slaves.

350k per head if we sold a million of our people we almost pay off Eskom debt ;). Would the Poms take 5 million?

but seriously, there is an easily quantifiable overdue carbon debt.

I won’t hold my breath

Please provide me with the Empirical Evidence that proves Carbon/CO2 causes any significant measurable warming at any atmospheric concentration before you mutter any more nonsense about carbon taxes and Socialist Idiocy.

kc:

Wow, I thought we were past the point where people still think that fossil emissions are good for the planet.

The published peer reviewed studies on this are overwhelming. Become famous in your own lifetime and disprove what for example the IPCC has published. Thousands of scientists from a wide scope of sciences and countries in a 30y long program of research agreed on https://www.ipcc.ch/report/ar5/syr/

The IPCC is a fraudulent organisation. Fraud is what fraud does. For example:

Moving goalposts wrt climate sensitivity.
Using models proved wrong by empirical evidence.
Picking arbitrary starting point on stochastic data to prove accelerated warming.
Cherry picking evidence to support false hypotheses. Ignoring evidence that contradicts their false hypothesis.
Publishing the fraudulent Mann hockeystich in two assessment reports despite evidence that the methodology was unscientific and contradicted by the evidence of tree rings and ice cores.
Ignoring the effect of the sun in climate models
Ignoring Holocene geological history
False claims such as “warming is unprecedented”. Even the EAU CRU fraudsters knew this was a lie.

Enough?

@Richard

I see you are still deciding to get your climate facts from a online blog sponsored by fossil fuel money instead of scientific journals.

China is not cutting down on emission but rather they are facing a situation where the price of coal is very high and the coal power plants can no longer produce cheap electricity. Electricity prices in china is regulated and therefore not viable to operate on expensive coal and hence the reason for power cuts. Its not because of them going green. If we go green, where will we get consistent power when there is no sun and no wind. Electricity storage systems are very expensive and coal at this moment is our cheapest option.
Like the previous commentator said, why are the EU and USA so concerned about our health when they are not prepared to allow to waver the IP for the corvid vaccines to save lives in Africa.

If the Chinese really believed the climate change and rising sea level BS, they would never have built low level islands for military bases in the South China Sea.

Those sand castles where only built in a attempt to extend their EEZ.

And who gets to pay these loans on top of the ZAR450 Billion in Debt which Eskom already owes???
Just asking for a friend!

Excellent timing! …..Now that China has a shortage of coal (and SA could make a killing), we are coerced to exit coal as a resource.

It’s like packing up your ice-cream stand opposite the school main gate, with full stock, just before the school’s closing bell sounds with a rush of kids.

SA may be the world’s 12th biggest greenhouse gas emitter presently, but WHICH nations contributed most to pollution since the Industrial Revolution from the late 1700’s? (…all these developed nations, now calling the shots)

So developed nations polluted the planet as a result of rapid industrialization the past 200+ years, and now that they have their industries in place, now a climate tax or disincentive is introduced on the rest….basically telling developing countries “we don’t need further global industrialization….it needs to stop right now”.

But sorry Europe / UK / USA….you had your turn to industrialize & pollute. How about backdating the climate change tax applicable to nations who historically contributed to global pollution the past few centuries?

Methinks, its all an agenda to stifle industrial competition from poorer, developing nations. Developed nations to retain the global industrial advantage. A different type of war. Follow the global money/hegemony…

If you don’t understand the basic science of GHGs green house gases, please go back to school, and do some math, science, physics and chemistry. There is also plenty of info on this on the internet, meant for the 10-15 year olds.

“…the basic science of GHGs green house gases”

You clearly don’t or you would be able to advise why a thousand years ago the Vikings settled in Greenland, planted cereals, raised live stock such as oxen

The temperature then was close to 2 degrees higher than today. This all happened between AD 985 and AD 1250, after which the little ice age gripped the northern Hemisphere parts of N. America and Europe

@Marcan. “GHG greenhouse gases”…wow, you also now heard of this stuff. And WHAT do you think caused climate change (both warming & cooling) during past 100,000+ year cycles? YES, GHG gasses…and LONG BEFORE human industrialization. YES, greenhouse gases were also present during the ‘dynosaur’ era, only in natural form.

Nobody is disputing human activity contribute to greenhouse gases. The question is by how much? (and activists OVERPLAY this for financial gain way out of proportion). During the Roman Empire, they allowed Christian religion to flourish, as it helped to pasify the poorer population to avoid rebellion against the wealthy. Now, Climate Change (or whatever narrative is used) is used to CONTROL PEOPLE for financial gain. You’ll figure it all out yourself once you’re past 30 age.

(Less than a million years ago parts of the USA Midwest were covered in glaciers, while 56 million years ago the Arctic was warm enough that crocodiles roamed Greenland.)

So the world is getting warmer again. Afraid of farming in Antarctica?

Gotta go…my preschool teacher is calling me back to class.

My Thungela shares keep me warm at night.

Coal ain’t going nowhere in Africa. Not in my lifetime, anyway.

The problem with buying Thungela is that you are knowingly buying something that will at some point be worth zero. (obviously no one knows when)

So you have to get the exit just right, because when the inevitable exit rush comes, you will get squashed in the stampede.

I avoid any share if I can’t see myself holding it for 10+ years (I would not buy BTI for the same reason)

You’re right. I don’t intend on holding Thungela forever.

I do intend on taking profits all the way, and dividends to boot.

Personally, I think coal still has a long way to go before it’s worth zero. Time will tell, though.

End of comments.

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