Germany Backs Coal Phase-out In South Africa With €700m

Posted by Eric Ojo African News, Europe, Featured, Latest Headlines, South Africa, Southern Africa Wednesday, November 3rd, 2021

(AFRICAN EXAMINER) – The German Government has announced its plan to invest €700 million (810 million dollars) to support the phase-out of coal-fired power stations in South Africa.

The funds are part of a new partnership with South Africa, which also includes Britain, the US, France and the European Union (EU).

A total of 8.5 billion US dollars in support is earmarked for the initiative over the next five years, much of it in the form of loans.

German officials at the COP26 climate conference in Glasgow announced on Tuesday.

The partners also want to mobilize private funds and World Bank resources to promote the use of new clean technologies, including green hydrogen, in South Africa.

Maria Flachsbarth from the German Ministry for Economic Cooperation and Development said that the aim was to enable a socially responsible phase-out of coal energy production in South Africa.

According to her, more than 90,000 miners are working in South Africa and need to be supported in the transition to clean energy production.

Acting Environment Minister Svenja Schulze said, “a successful coal phase-out in South Africa has the potential to become a blueprint for other regions.”

Also in her speech, the UN Climate Change Conference (COP26) at the Scottish Event Campus (SEC) on Monday, Germany outgoing Chancellor, Angela Merkel announced a new energy partnership with South Africa as part of efforts to wind down the global coal industry.

The German chancellor described the initiative as an important “pilot project for many African countries.” She did not go into further detail.

Merkel, whose coalition committed to closing down Germany’s coal-fired power plants by 2038, said such action was necessary to prevent global temperatures from rising further.

She praised the Group of 20 nations for agreeing to halt the public financing of coal plants abroad during their weekend summit in Italy prior to the climate conference.

Meanwhile, observers have however reacted with disappointment after the world’s 20 biggest economies failed to agree on target dates for carbon neutrality or phasing out coal.

Merkel also expressed optimism that the catastrophic fallout of climate change could be avoided yet. “We know that the effects of climate change are devastating. And we must – and I also say we can – implement the Paris Agreement,” she told the COP26 delegates.

The chancellor called on developed nations to provide assistance to poorer countries.

“We must accept that we will not reach 100 billion dollars in funding until 2023,” she said, referring to industrialized nations’ goal of providing 100 billion dollars annually to poorer nations as early as 2020.

She equally expressed her support for carbon pricing as an effective tool for combating climate change.

Carbon pricing policy places a levy on emissions of carbon dioxide in a bid to incentivize investment in clean energy.

“The EU already has this kind of pricing model for the industrial sector. Others, for example China, are introducing this now,” she further explained.

She also pushed for further discussion on the topic and for decisions to be made as the UN Climate Conference (COP26) got under way in Glasgow.

At the invitation of the United Nations, government representatives from around 200 countries plan to spend a fortnight in the Scottish city discussing how humanity can contain accelerating global warming.

“Once CO2 has a price, investors of private capital can also know in which direction to invest technologically,” Merkel said, adding that it is important to use not only taxpayer money in the fight against global warming but also instruments that make “economic sense.”

Overall, a large amount of investment is needed to meet global climate targets. The German leader referred to an estimate by former UN Secretary-General Ban Ki Moon that global climate change mitigation will require annual funding of 800 billion dollars.