Banks back clean energy

Johannesburg- South Africa’s banks have committed to support independent power producers who make use of a proposal that Eskom-owned land in Mpumalanga is leased to renewable energy developers.

The power utility announced it will auction 36 000 hectares of land around its ageing coal-fired power plants to independent renewable energy producers, capped at 100 megawatts for a minimum period of 20 years.

The country’s big banks welcomed the move by Eskom.

“The Banking Association South Africa (Basa) is confident that the potential projects will be attractive to independent power producers and South African banks, which are committed to financing sustainable energy projects. While this initiative is the first of its kind, Basa looks forward to working with Eskom more on such initiatives,” the association said.

Sunday World this month reported that Fitch Solutions, the affiliate of Fitch Ratings, has backed South Africa’s coal production to rise in the coming years, despite the global push towards the green transition gathering momentum in light of the COP26 summit.

The research firm, in a country note, said its estimates were largely due to the country’s heavy reliance on coal-fired energy, demand from export markets, in particular Asia and China, and continued financing from South African banks.

South Africa’s Integrated Resource Plan 2019, said coal would “continue to play a significant role in electricity generation in South Africa in the foreseeable future”.

South Africa in November secured $8.5-billion (about R135-billion) to help end its reliance on coal in a deal announced at the COP26 climate summit, held in Glasgow, Scotland. The Minerals Council, formerly the Chamber of Mines, welcomed the announcement by Eskom.

The council’s CEO Roger Baxter said the auction of land around Eskom’s power plants for rapid construction and commissioning of renewable energy projects would go a long way to taking the pressure off Eskom’s ageing fleet of coal-burning plants.

“The construction of renewable energy projects on Eskom land in Mpumalanga will go towards meeting commitments on a just energy transition as the utility closes its old coal-fired plants,” he said.

The Congress of South African Trade Unions wants the government to allow for the inclusion of workers in the discussion of the just transition as well as to allow for an energy policy that ensures that renewable energy is state-owned.

Meanwhile, Eskom reported an R9.2-billion interim profit for the six months ended in September but still expects to incur an R9.1-billion loss when the financial year ends in March.

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