Greenhouse Gas Emissions Reduction and Energy Sector Development Project
FACILITATING CLEAN ENERGY GENERATION PROJECTS IN SOUTH AFRICA AND REDUCING GREENHOUSE GAS EMISSIONS
South Africa is on the trajectory of greener and more sustainable development. South Africa has committed to a reduction in greenhouse gas emissions to a range between 398 and 614 million metric tons of CO2 equivalent by 2030. This commitment was translated into Nationally Determined Contributions from South Africa to the Paris Agreement on Climate Change 2015. The biggest potential contribution to the targeted emission reduction is expected to be made by a shift towards low carbon energy sources for electricity generation.
Development Bank of Southern Africa (DBSA) has historically and continues to play a significant role in developing the clean energy sector in South Africa through financing renewable energy projects. To enhance the role played by this national financial intermediary, in July 2018, NDB approved a USD 300 million loan to DBSA for on-lending to renewable energy projects (sub-projects) including, but not limited to, wind, solar and biomass. The combined total cost of the sub-projects is estimated at USD 600 million and NDB’s loan will finance up to 50% of each of the sub-projects costs.
The project’s objective is to facilitate investments in renewable energy that contributes to the reduction of greenhouse gas emissions and a diversification of the energy generation mix in South Africa. It is expected that at least 3 renewable energy projects with not less than 375 MW of total installed capacity shall be put into operation by 2021. Through this project, South Africa, with the support of NDB will be able to work towards its commitments under the Paris Agreement on Climate Change 2015.