- Government will make sure not to secure climate finance deals that are detrimental to the country's development path, says President Cyril Ramahosa.
- The president said that agreements must not negatively affect the country's fiscus either.
- Negotiations to secure deals emanating from a R131 billion offer is expected to take six months to a year to finalise.
South Africa will not "short-change" itself when it comes to securing climate finance deals that will aid its transition to a low-carbon economy, according to President Cyril Ramaphosa.
The president was replying to questions posed by Members of Parliament on Thursday and addressed a question from EFF leader Julius Malema about the terms and conditions of the R131 billion offer the country received from developed nations - the UK, US, EU, Germany and France - to assist in the transition away from coal.
Ramaphosa noted that the commitment from the international partners did not mean that South Africa must accept an offer that would be of "unfavourable terms" or of which financial arrangements would negatively affect the country's fiscus.
"The pace and extent of decarbonisation in SA will be determined by the financial support available and it will have to take into account our own country's social and economic challenges. In other words, it is not a blank cheque. It must take into account our own situation, challenges..." Ramaphosa told the National Assembly.
The president stressed that the country must continue to chart its own developmental path - which must be sustainable and inclusive.
Ramaphosa reiterated previous statements that the bulk of the offer would go towards funding Eskom's just transition plan - which involves the decommissioning of old coal-fired power stations - and to develop in new sectors such as electric vehicles and the green hydrogen economy.
When it comes to a just transition - the funding needs to address the needs of communities which will be affected by the closure of power stations - through re-skilling, employment creation in green industries, he explained.
As to what forms the funding will be - Ramaphosa said that grants and concessional funding are great sources. Government will make sure that part of the funding is in grant form - without any conditions.
He added that concessional funding is usually less onerous than straight loans. The aim is to make sure the concessional finance is not onerous on the fiscus either. He said government will make sure that the country will not be lumped with conditions that "debilitate" the country's developmental initiatives.
A negotiations team is being established between South Africa and partner nations.
"We will deploy some really good financial brains, from the public and private sector, including trade unions - so we can negotiate really good workable agreements, if it ever gets there," the president said. "I do not foresee us being short-changed in any way," he assured. He emphasised that agreements should not be detrimental to South Africa's development path.
"We need agreements to advance our own situation," Ramaphosa said.
This negotiation process is expected to be finalised over the next six months to a year. Ramaphosa said that it will be done so transparently - so the public can know if the funding is from the local market or the offshore market.
Earlier on Thursday, Cabinet issued a statement indicating an inter-ministerial committee chaired by the president will coordinate work on the just transition plan and financial offers made to the country.
Cabinet has mandated government to appoint a financial team that consists of National Treasury, the Industrial Development Corporation, the Department of Forestry, Fisheries and the Environment, Eskom and other finance experts.