Plans for world’s largest green-energy financing enterprise are being ironed out in South Africa. Currently, researchers in South Africa are looking for ways to assist Eskom, a state-owned entity that is approximately R450-billion in debt to the state. Meridian Economics, a think tank based in Cape Town is planning this initiative which is being considered by the government.
Private funders, and development finance institutions would loan money to Eskom at rates that fall below commercial rates, and in exchange, Eskom would have to prioritize the closing of coal plants and replace them with renewable energy. South Africa is under pressure to reduce greenhouse emissions by 42% by 2025 as it is currently the world’s 14th largest producer of greenhouse gasses. Emily Tyler, a climate economist at Meridian says, “This would be the largest and most significant global climate finance transaction to date”.
As it stands, several development finance institutions, climate funds, and other organisations are interested in this initiative. Should this plan be implemented, the government would need to commit to break Eskom up into generation, transmission, and distribution units under a state holding company and reorganize Eskom’s debts. Discussions of this initiative are still in its early stages.
By Linda Buthelezi