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World Bank funds half-million for renewable energy and efficiency in South Africa

Funding to the Clean Technology Fund (CTF) Investment Plan in South Africa will allow the country to move towards its goal of 4% of electricity from renewable energy by 2013.

The US$500 million funding for South Africa will also allow the country to improve energy efficiency by 12% by 2015 and provide one million homes with solar water heating over the next five years.

The CTF investments in renewable energy and energy efficiency will mobilise financing of US$1 billion from bilateral and multilateral funders, as well as the private sector. Partners in the CTF Investment Plan include the government of South Africa, African Development Bank, World Bank and International Finance Corporation.

The South African Investment Plan is the fifth plan endorsed by the CTF, which is a multi-donor trust fund created in 2009 as part of the Climate Investment Funds (CIF) to provide scaled-up financing for the demonstration, deployment and transfer of low carbon technologies such as renewable energy with a significant potential for long-term GHG mitigation. CTF resources amount to US$5 bn pledged by Australia, France, Germany, Japan, Spain, Sweden, United Kingdom and the United States.

The priority areas to be funded under the CTF-funded IP are:

  • Conversion of a half-million households from electric to renewable solar water heating over the next five years, by providing support to municipalities and the private sector to deploy solar water heaters. CTF support will accelerate market penetration of solar and development of a domestic solar industry by buying down high installed cost, market development, and demonstrating business models;
  • An Eskom (South African electricity public utility) 100 MW Upington concentrated solar power (CSP) plant, which will be the first commercial scale concentrated solar power plan in sub-Saharan Africa. The IP will include final design and risk mitigation review followed by plant construction and operation, creating the transformational effect of promoting concentrated solar power deployment by proving the technology in operation and establishing cost and performance benchmarks;
  • Eskom’s Western Cape Province Wind Energy Facility (100 MW wind farm) which will be the first utility-scale wind facility. CTF support will “transform the nascent wind sector with a robust pipeline of large-scale wind power projects, along with an increased understanding of the bankability of wind development projects”;
  • Increasing potential energy efficiency investments through expansion of bank lending to commercial and industrial sectors through lines of credit to commercial banks, contingent financing to foster energy service companies, and financial incentives or risk products to market leaders.

“Many of our citizens struggle to get access to the most basic of energy services; this plan allows us to help them move directly into a new era of energy access based on the principle of low-carbon growth and development,” says South Africa’s environment minister Buyelwa Sonjica. “In this way, South African citizens can serve as models of a new way of life based on clean energy.”

South Africa’s Long Term Mitigation Scenarios have prompted a national climate policy based on lowering GHG emissions and, in response to these scenarios, the government has adopted mitigation strategies which focus on energy efficiency and renewable energy alternatives. As a result of these strategies, South Africa’s emissions will peak by 2030 and then decline, and focus will be placed on scaling up grid-connected solar thermal power, utility-scale wind power development, solar water heaters, and demand-side energy efficiency.

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Energy efficiency  •  Policy, investment and markets  •  Solar electricity  •  Solar heating and cooling  •  Wind power