Germany, the United States, the United Kingdom and France have struck a deal worth over R130 billion with South Africa aimed at speeding up the country's shift away from coal, it was announced on Tuesday.
President Cyril Ramaphosa said in a statement that the "historic" deal would help SA reach its revised Nationally Determined Contribution to reduce domestic carbon emissions to within a target range of between 420 CO2-eq and 350 CO2-eq by 2030 – in line with the goals of the Paris Agreement.
"[This] represents our country’s best effort to confront climate change, which will have a devastating impact on sub-Saharan Africa without large-scale mitigation and adaptation efforts," the president said.
The deal was confirmed at the COP26 climate talks in Glasgow. It will see wealthier nations mobilising an initial $8.5-billion (R131 billion) over three to five years in the form of range of instruments, including grants and highly concessional finance.
The concessional finance that will be mobilised through the deal will accelerate investment in renewable energy and the development of new sectors such as electric vehicles and green hydrogen, Ramaphosa said.
"This will provide a significant boost to investment and growth while ensuring Eskom can access resources to finance repurposing of coal fired power-stations due for decommissioning over the next 15 years," he added.
According to the Financial Times, US President Joe Biden said the partnership between the four nations and SA would see South Africa closing its coal plants ahead of the current schedule while supporting a just transition to renewables.
Ursula von der Leyen, President of the EU Commission, said she hoped the partnership with SA would be a blueprint for other developing nations.
While climate activists have warned it is essential to shift away from coal urgently, concerns have been raised repeatedly over the expected cost of doing so. South Africa has the highest carbon intensity among G20 countries, but Eskom chief Andre de Ruyter has warned that funding to the tune of some R440 billion to R500 billion is needed to support the ailing power utility's transition to greener technologies.
A key concern has been job losses, which Ramaphosa said could be mitigated by the deal.
"At the heart of this partnership is the importance of a just transition, which includes support for workers and communities affected by the transition away from coal and enables the creation of quality green jobs," he said.