Norway and the UK will spend R600-million developing renewable energy projects in South Africa to help fund the nation’s transition from coal-fired power generation to clean fuels.
The countries’ development finance institutions will help black-owned renewables company H1 Capital build 2.4GW of new wind and solar plants, according to a joint statement. The investment is related to a commitment made by countries during the Cop26 summit.
South Africa depends on coal to generate more than 80% of its electricity through state-owned Eskom. The country secured US$8.5-billion (R130-billion) at Cop26 to fund an energy transition that could become a model for developed nations to help finance similar plans in other developing countries.
Most of the Norwegian and UK funding will be used for projects H1 was awarded in South Africa’s fifth round of renewable energy auctions. The company has a portfolio that includes wind, solar and hydro projects.
The deal marks a first investment by the Norfund-managed Climate Investment Fund, through which Norway plans to allocate more than $1-billion over five years. Britain invested through its CDC Group. — (c) 2022 Bloomberg LP