South Africa’s government is negotiating two loans worth a total of 600 million euros ($601 million) that form part of a $8.5 billion climate finance deal it was offered by wealthy nations at the COP26 talks in Glasgow last year.
The loans are being sought from the French Development Agency and German state-owned investment and development bank Kreditanstalt für Wiederaufbau, Wanga Cibi, the acting chief director of debt operations and asset and liability management, at the National Treasury, told reporters in Cape Town on Wednesday ahead of the country’s budget update.
“We are actually at an advanced stage and should be able to give out some detail in the coming weeks,” she said.
South Africa’s cabinet last week approved an investment plan that will help reduce the nation’s reliance on coal, which is used to generate more than 80% of its electricity, a key step in unlocking the climate financing.
The plan envisages the closure and re-purposing of coal-fired power plants owned by Eskom Holdings SOC Ltd., the state power utility, so additional renewable energy can be produced. It also covers expanding the transmission grid and fostering the development of electric-vehicle and green hydrogen industries.