International financiers scrambling to fund transition from coal in the country
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INTERNATIONAL financiers are scrambling to fund South Africa’s just transition to renewable energy, which exists because of the abundant wind and sun resources the country has, raising the potential for job creation, but only if the private sector is given more responsibility than the government for driving the change.
Panellists at FutureGrowth Asset Management’s discussion on Reform of SA’s energy sector-A pipe dream or a window of opportunity said more than $100 billion (R1.446 trillion) was available to the country over the next five years for the transition as it has ideal conditions that could set global trends.
Futuregrowth has, itself, facilitated funding of more than 33 renewable energy projects across different windows, with more than R10bn invested in renewable energy in the past 10 years.
The panellists, which are including Energy activist Chris Yelland, Futuregrowth’s Paul Semple, the head of Unlisted Credit, and Bongile James, a Futuregrowth investment analyst, sang from the same hymn sheet on the potential for job creation if the technologies, including wind turbines, solar panels, storage batteries and other components were developed in the country by the private sector.
The opportunities come from the gaps that de-scaling from coal would create over the next 10 years as South Africa has to reduce fossil fuel reliance by 75 percent or 11 000 kilowatts up to 2035 and a further similar capacity after that.
“But the public sector procurement processes are very slow. We must look at the private sector as a major part of the solution.
“The government does not create jobs. It facilitates it.
“The concession for the private sector to create up to 100 megawatts is a big jump. It needs to be encouraged and incentivised. So far, it has only been just allowed,” Yelland said.
James said that there was intense competition for the funding in capital markets, and the window of opportunity was closing as “cleaner rivals of fossil have a better chance of attracting finance.