Germany and France are in talks with South Africa’s National Treasury over about 600 million euros ($578 million) to help it transition away from the use of coal.
The loans may form the first part of $8.5 billion in financing offered to the country during last November’s global climate summit.
The money will go some way toward addressing the funding needs of the beleaguered national power utility, Eskom Holdings SOC Ltd., as it prepares to close down some of its coal-fired plants and re-purpose them for the production of green energy.
However, with just over two months to go until COP27, the next iteration of the climate summit, it’s uncertain if there will be a clear statement on progress by South Africa and the funding partners — Germany, France, the UK, the US and the European Union.
The arrangement is seen as a prototype that, if successful, could see similar arrangements concluded with other coal-dependent developing nations such as Indonesia and Vietnam.
That arrangement will be funded by the World Bank and will include concessional loans from the Canadian Clean Energy and Forests Climate Facility and grants from the World Bank’s Energy Sector Management Assistance Program, the World Bank said in response to queries.
The Washington-based lender said It will go before the World Bank’s board in the next few months.