Ramaphosa appeals for improved lender policies for energy transition plans

President Cyril Ramaphosa has told world leaders at the UN Climate Change Conference (COP27) in Egypt that multilateral development banks and other funding institutions need to be reformed to help developing countries in their fight against climate change.

“At present multilateral support is out of reach of the majority of the world’s population due to lending policies that are risk-averse and carry onerous costs and conditionalities,” said Ramaphosa.  

The president made the call while delivering South Africa’s statement at the high-level segment hearing of heads of state on Tuesday.

He said funding institutions need to transform and change the way they fund projects to enable countries to develop with regards to climate change.

“The commitments needed for SA to embark on this difficult journey are close on $90-trillion (R1.6-quadrillion) and the categorisation of the funding needs to be well packaged so that there are meaningful grants, concessional loans and investments by a variety of institutions,” said Ramaphosa.

He added that a clear road map was needed to deliver on the Glasgow decision to double adaptation financing by 2025.

“South Africa is committed to achieving the most ambitious end of the mitigation range in our nationally determined contribution,” he said.

Ramaphosa said SA was guided by a just energy transition framework, an investment plan that outlines the enormous scale and nature of investments needed to achieve decarbonisation goals over the next five years.

“We are already scaling up investment in renewable energy and are on a course to retire a number of coal-fired power stations.”

On Friday Ramaphosa unveiled an ambitious just energy transition investment plan and asked the country to comment. The plan will provide government with a blueprint to address challenges of poverty, energy security and the urgent threat of climate change. A “just and fair” transition will be at the centre of the government’s agenda.

He made a commitment to use COP27 to canvass for large-scale investments needed to carry out the plan.

Ramaphosa said at COP26 in Glasgow last year, France, Germany, the UK, US and the EU offered support in the form of a just energy transition partnership.

“It is our hope that this partnership will offer a ground-breaking approach to funding by developed economy countries for the ambitious but necessary mitigation and adaptation goals for a number of developing countries.”

Ramaphosa also used the opportunity to call on world leaders to honour their commitments.

Like other vulnerable regions, Ramaphosa said, Africa needs to build adaptive capacity to foster resilience and address loss and damage as agreed at Paris COP21.

“To achieve this, our continent will need a predictable, appropriate and upstream funding stream and technological support. This must support our right to development, international equity and transmissions that are just and inclusive.”

This, said Ramaphosa, places a great deal of responsibility on developed economies to honour their commitments to those countries with the greatest need and countries that face the greatest environmental, social and economic impacts of climate change.

“The commitments must be honoured, because failing to honour these breaks trust and confidence in the process,” he said.

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