[South Africa] DBSA, GCF partner to help reduce renewables business costs
The Development Bank of Southern Africa (DBSA) has signed an agreement to reduce the cost of investing in South African renewables by boosting the private sector’s investment in wind and solar power in partnership with the Green Climate Fund (GCF).
DBSA will now move to implement the GCF-supported Embedded Generation Investment Programme that provides credit support to renewable energy projects – with a targeted capacity of 330 MW in solar and wind-generated power.
DBSA Group Executive for Project Preparation Mohale Rakgate, said at the signing: “DBSA is excited to partner with GCF on yet another ground-breaking climate finance initiative that enables the private sector to develop clean energy without requiring government guarantees. This will further enhance South Africa’s transition to a more sustainable, low-carbon economy.”
GCF’s Executive Director Yannick Glemarec said the signing of the Funded Activity Agreement (FAA) during GCF’s second global gathering to strengthen the private sector’s role as a driver of climate action reflected the importance of business-led efforts to reduce greenhouse gases.
“The ever increasing need to take climate action also offers profitable investment opportunities as firms find innovative ways to forge low-carbon economies,” he said. “This programme will open new markets to independent power producers by enabling them to directly sell energy to industries and cities without sovereign guarantees.”
Mr Glemarec added that GCF’s partnership with DBSA is essential, as local knowledge of business environments is key in finding ways to remove the current barriers of low-carbon investment.
South Africa’s planned increased use of renewable energy is a key part of its commitment to peak and then decline its emissions from 2025 to 2030 under its National Determined Contribution (NDC) under the Paris Agreement. This includes a move away from its current reliance on coal, which currently supplies around 90 percent of the country’s electricity generation needs.