South Africa coal plant for clean energy needs millions in loans

Converting Komati to be part of the clean energy revolution is seen as an important test case for coal-reliant South Africa, the world’s 16th-largest emitter of greenhouse gases, and developing nations elsewhere. It’s supported by $497 million, most of it from the World Bank.

The problem, energy experts say, is that almost all that money is in the form of loans that can be difficult for developing nations to repay. And that risks hobbling the global effort to cut emissions and limit global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels to stave off the worst effects of climate change.

For South Africa, which needs an estimated $38 billion over the next five years to meet its climate goals, the structure of the Komati funding should be concerning, said Andrew Lawrence, an analyst and senior researcher at the University of Witwatersrand in Johannesburg.

Not only is most of the money in loans, but the loans are dollar-denominated. South Africa’s rand will depreciate against the dollar, “so that is going to become an increasingly snowballing financial burden,” Lawrence said.

By MOGOMOTSI MAGOME and SIBI ARASU
https://apnews.com/article/climate-finance-paris-summit-bridgetown-initiative-mottley-72ebe16585b5122cab441a03360b9410