Decision nears on $2.6bn of green funds for South Africa
A decision on a disbursement by the World Bank-linked Climate Investment Funds that would trigger a $2.6-billion green-finance package for South Africa may be made as early as Friday, people with knowledge of the matter said.
The CIF, which is backed by money from 15 of the world’s richest nations, is considering a $500-million payment to South Africa to help it transition away from the use of coal, the dirtiest fossil fuel. If granted, that would unlock a further $2.1-billion in funding from multilateral development banks and other sources.
The decision was initially delayed last year by South Africa’s attempt to alter the terms of the pact by keeping three coal-fired power plants open longer than had been agreed earlier. The US had asked for more time and had been given until Friday, one of the people said, asking not to be identified before an announcement.
If further questions are asked by any of the countries, the decision may be pushed out further, another person said. The disbursement would need backing from all of the participating countries unless they abstained, the person said.
If a decision is reached it will be made public on March 10, one of the people said.
South Africa’s presidency declined to comment, as did the CIF. The US Embassy in South Africa didn’t respond to a request for comment.
Losing the finance would be another blow to South Africa’s bid to fund the rollout of green energy and close the coal-fired power plants that supply more than 80% of its electricity, making it the most carbon-intensive economy of any nation with a population of more than 4-million people. On Feb. 28, the US notified South Africa that it was canceling the $1-billion it pledged to a separate $9.3-billion climate pact between the nation and some of the world’s richest countries.
The CIF’s two biggest patrons are the UK and the US. They have contributed or pledged $3.61-billion and $3.52-billion respectively out of a total of $12.1-billion, the CIF said on its website. Other major contributors include Japan, Germany and Canada.
Since Donald Trump’s inauguration as US president on Jan. 20, he has railed against climate finance and pulled money from clean-energy initiatives including a pledge of $4-billion to the South Korea-based Green Climate Fund, which at $17-billion is the biggest facility of its kind.
He’s also soured relations with South Africa by claiming that South Africa is confiscating land. The South African authorities have not confiscated any private land since the end of apartheid in 1994.
The US’s state and Treasury secretaries skipped Group of 20 meeting in South Africa last month. The African country is this year’s G-20 host.
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