Developing countries have been arguing for years that they need more financial support from wealthy nations in order to accelerate their transition away from fossil fuels.
The world is about to see how it might work in practice.
On Tuesday, South Africa was represented at the Glasgow climate summit announced that it had secured commitments for $8.5 billion in financing over the next five years from France, Germany, Britain, the United States and European Union to help install more clean energy, accelerate the country’s transition away from coal power and cushion the blow for workers who may be affected by the shift.
“This is a big deal,” said Jesse Burton, an energy policy researcher and senior associate at the University of Cape Town and E3G, a research group that focuses on climate change. “It’s a major test of whether wealthy nations can help developing countries embark on a just transition away from coal.”
South Africa, the world’s 15th-largest emitter, still relies overwhelmingly on coal, which supplies 87 percent of the nation’s electricity. The country is a growing nation, however. has pledgedIt faces immense obstacles to reduce its carbon dioxide emissions by 2030 and now as part of global efforts for climate change mitigation.
South Africa’s state-owned utility, Eskom, is already drowning in more than $27 billion in debtThis is partly due to investments in coal plants. The utility has struggled with reliable power supply and often resorts to rolling blackouts in order to meet demand.
Analysts have indicated that South Africa will need to accelerate the retirement of coal plants and build large amounts of renewable energy generation to meet growing demand.
Making the task even tougher, the country’s fragile economy remains dependent on coal jobs, with more than 120,000 peopleWorking in power plants or mines. The political contentiousness of past discussions on when and how to shift away coal has been a problem.
South African President Cyril Ramaphosa stated Tuesday that the $8.5billion in loans and grants from wealthy countries could help the country make the transition to renewable energy. Eskom will also be able to access resources to repurpose the old coal stations that are due for retirement in the next 15 years.
The country will also look into creating new jobs for ex-coal miners.
“It is proof that we can take ambitious climate action while increasing our energy security, creating jobs and harnessing new opportunities for investment, with support from developed economies,” Mr. Ramaphosa said.
There are still many questions about the practical operation of the partnership. Details about how much clean energy will be developed and how much coal will be phased off are still unknown. Analysts said there are still questions about whether donors countries will fulfill their commitments, if transparency will be maintained regarding how the funds will be used, and if they will benefit local communities.