The climate finance that South Africa is seeking to fund our move away from coal-based electricity to sun and wind energy – while also elevating 120 000 power station employees and mineworkers into the new green era – is a model that top global funders are hailing as a potential model solution for all developing countries.
In terms of the model, the very action of going green becomes the interest on the loan received, which means that multilateral public and private funders will receive carbon reduction, and not cash, as interest on the bonds they provide. This sets the stage for South Africa to be able to invest heavily in clean power and accelerate away from coal at the same time. What brilliant thinking. It’s like receiving a 20-year bond on a new house and not having to pay back a cent in interest, provided the house is made progressively cleaner!
Little wonder that it has made headlines in the Washington Post, where the Rockefeller Foundation’s Mike Muldoon describes South Africa’s climate finance model as “one of the only solutions that meets the scale of the challenge”. Besides funding a clean, green and just transition, it also reduces energy costs, lowers load-shedding risk and meets global climate obligations, which the world’s foremost leaders are urging all to do.