Eskom says that it will need between $30 billion (R460 billion) and $35 billion (R537 billion) over the next 15 years to transition away from generating electricity from coal.
This is more than triple the amount Eskom previously said it would need to shut down most of its coal-fired power stations by 2050.
“As a major contributor to South Africa’s carbon footprint, Eskom will play a pivotal role in enabling a just energy transition from coal to low and no-carbon sources of electricity generation,” said Eskom group CEO André de Ruyter.
De Ruyter’s statement comes after US President Joe Biden said he’s offering an alternative to China’s plan to build infrastructure in countries that are among the most vulnerable to climate change.
South African President Cyril Ramaphosa announced yesterday that South Africa would receive $8.5 billion (R130 billion) in funding over 3–5 years from several rich nations to support the country’s move from coal to clean energy.
The deal was announced at the Conference of the Parties (COP) and the partnership includes the United States, United Kingdom, France, Germany and the European Union.
South Africa will receive a range of funding—including grants and concessional finance—to accelerate investment in renewable energy and the development of green hydrogen.
The country is the world’s 12th-biggest emitter of greenhouse gases and depends on coal to generate over 80% of its electricity.
De Ruyter said that the agreement announced at COP26 is an important first step towards funding the transition—in a socially and economically just way—while enabling South Africa to meet its new and ambitious Nationally Determined Contribution targets.
Reuters and Bloomberg previously reported that Eskom said it would need $10 billion (R153 billion) to shut down most of its coal-fired plants by 2050.
De Ruyter created a funding plan involving a multi-lender loan facility from development finance institutions that would be paid out in segments over several years to obtain the required funds.
The funding commitment for South Africa’s migration from coal comes after Eskom announced it would convert its Komati power plant to generate energy from renewable sources.
Komati’s last coal-fired generation unit is due to shut down next year.