(Bloomberg) — Germany’s climate envoy said her country wants clarity on South Africa’s plans to slow the closure of its coal-fired power plants and change the terms of a landmark climate finance pact.
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The European country is a founding member of the $9.3 billion agreement, known as the Just Energy Transition Partnership, under which some of the world’s richest countries will provide loans and grants to South Africa on the condition that the country reduces its reliance on coal.
In July, South Africa said it would extend the life of three coal-fired power stations it had closed until 2030 to boost energy security. It said it would operate a number of other facilities below capacity to ensure it still met an emissions reduction target, without giving details of how it would achieve this.
“In terms of the timeline for coal, we understand that those tonnes will be produced elsewhere and we want to understand that,” Jennifer Morgan, the German state secretary and special envoy for international climate action, said at an event in Cape Town on Monday.
The development could affect about $2.6 billion in financing from multilateral development banks and other sources. The first tranche of this would be a $500 million disbursement from the Climate Investment Funds’ Accelerating Coal Transition investment program, which could decide on the disbursement in October.
Failure by a Group of 20 country to meet its coal energy commitments would be a blow to the JETP program, which has pledged more than $40 billion to South Africa, Indonesia, Vietnam and Senegal. South Africa’s withdrawal from the original terms of its agreement could raise questions about the program’s credibility.
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Morgan said she will also meet officials from South Africa’s new coalition government this week, including Finance Minister Enoch Godongwana. They will discuss the country’s G20 summit next year and the COP international climate summit in Baku, Azerbaijan later in 2023.
“We want to know what their priorities are,” she said. “The best time to talk to a new administration is when they are just in power and the thinking is still fresh.”
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