Up to 12 local low-carbon projects targeted in UK support programme

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Everlectric, an electric vehicle and service business was part of the first phase of the Climate Finance Accelerator in SA.
Everlectric, an electric vehicle and service business was part of the first phase of the Climate Finance Accelerator in SA.
  • The second phase of the UK's Climate Finance Accelerator programme in South Africa kicked off a few weeks ago.
  • The programme, which provides technical assistance and links to potential financiers, targets up to 12 low-carbon projects this year.
  • Some projects from the first phase last year have landed financing deals and clients.
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Up to 12 low-carbon projects could benefit from technical assistance from the UK's Climate Finance Accelerator programme, says UK deputy high commissioner to South Africa, Adam Bye.

The Climate Finance Accelerator (CFA) is a technical assistance programme funded by the UK government, which supports developing countries achieve their climate commitments under the Paris Agreement.

South Africa is among the eight countries where climate-smart projects are being assisted. Others include Colombia, Nigeria, Mexico, Turkey, Peru, Pakistan and Egypt. The objective of the programme is to support the bankability of climate-smart projects, especially where availability and access to climate finance is a challenge, Bye said.

Bye was speaking at the virtual launch of the programme's second phase on Thursday. The CFA ran its first phase in South Africa last year, where 13 low-carbon project developers were selected out of 120 applications. The chosen projects benefitted from training on various aspects.

The UK partners with local entities, such as the National Business Initiative (NBI) and GreenCape, to provide training. The project developers also get a chance to attend workshops in London.

"It is really heartening that a number of projects from the first cohort have progressed to deals with customers and financial providers as a result of CFA support," said Bye.

Among these projects is Everlectric – an electric vehicles and service business. Everlectric is partnering with transport logistics company DSV, in assisting retailer Woolworths in the rollout of electric-panel vans, Fin24 previously reported. The electric vehicle project will help Woolworths reduce its carbon emissions.

Speaking at the virtual launch, co-founder of Everlectric, Ndia Magadagela, shared that one of the benefits of the CFA was having a "set of professional eyes" looking at its project pitch to refine its business case. The training also shed light on business aspects to consider for their business case – such as gender equality and social inclusion, said Magadegela. The CFA also helped with introductions to financiers.

READ | SEE | Woolworths to replace majority of its delivery fleet with electric vans

Calls for project proposals for the second phase of the programme opened on 30 June. The submission deadline is 12 August. Projects from different sectors including energy, transport, land use and forestry and the circular economy are expected to be pitched. "These sectors represent sizeable and significant economic development opportunities for local and international investors," said Bye.

Expanding more on the application requirements, projects need to be beyond the pre-feasibility stage of development, and financing needs should be between $4 million (~R68 million) and $150 million (~R2.5 billion), explained Reitumetse Molotsoane, acting head of environmental sustainability at NBI.

The projects must be geared at climate change mitigation – or reducing greenhouse gas emissions, a driver of climate change. Having a "commercially viable" business model is also key, added Molotsoane.

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