South Africa's clean energy transition requires $30 billion investment

As South Africa gears up to transition from fossil fuel to renewable energy, the African Development Bank estimates the country will require more than $30 billion in capital investment.

South Africa is a major exporter of coal and depends on it for 75 percent of its energy needs.

Due to its dependency on coal, South Africa is the world's 12th-largest emitter of carbon dioxide, a reality that has attracted both internal and external pressure for the country to transition to clean energy.

According to Gwede Mantashe, the minister for mineral resources and energy, the South African government is committed to achieving a 15 percent reduction in coal power production and an 18 percent increase in renewable energy by 2030.

"We want to move from high to low carbon emissions. The Just Energy Transition plan should be about people's lives and livelihoods, particularly in coal mining areas. We must develop a concrete alternative economic program for communities in those areas," he said.

Mantashe, who spoke during a meeting with Akinwumi Adesina, president of the African Development Bank, said the government was planning to generate additional 1,500 megawatts of electricity from coal.

"We want to be actively involved in the experiment for cleaner coal production technology, including carbon capture and storage. If the experiment works, we'll expand it and that will reprieve coal as a commodity," he said.

Adesina assured South Africa of the bank's strong support as the country transitions to renewable energy.

Towards that end, he said the bank was in the process of setting up an African Energy Transition Facility to help South Africa secure adequate financing for its energy transition.

"South Africa cannot and should not embark on the journey of energy transition without the necessary financial support," Adesina said.

"Through the African Energy Transition Facility, South Africa can leverage the $8.5 billion in grants from G7 countries to generate all the money it needs for its just energy transition without getting into debt."

In November, the governments of South Africa, France, Germany, the United Kingdom and the United States, along with the EU, announced a long-term Just Energy Transition Partnership to support South Africa's decarburization efforts.

The partnership is expected to prevent up to 1-1.5 gigatons of emissions over the next 20 years as well as support South Africa to move away from coal and accelerate its transition to a low-emission, climate resilient economy.

Adesina also urged the country to invest in solar power as part of its energy mix. "Africa today has no choice but to transition out of coal. But God is good to us. We have 11 terawatts of solar. That is Africa's future," he said.

"South Africa can help make that future happen. South Africa can and should position itself to be the lead manufacturer of polysilicon."

Polysilicon is used to manufacture solar panels and other products, which are currently imported mainly from China.