COP27: SA requested more grants rather than loans for climate plan – Ramaphosa

South Africa had asked the United States, United Kingdom, France, Germany, and the European Union to consider additional funding for the country’s climate goals in the form of grants rather than loans, a request that was “well received,” according to President Cyril Ramaphosa.

On Tuesday, the president addressed a press conference at the COP27 in Sharm El-Sheikh, Egypt. He had earlier delivered the national address, in which he reiterated calls for developed nations to honour their commitments to provide financial assistance to developing economies in response to the climate crisis.

South Africa publicly released its R1.5 trillion just energy transition investment plan for the next five years ahead of COP27. On Monday, the plan was formally handed over to the International Partners Group, which includes the United States, the United Kingdom, France, Germany, and the European Union. The investment plan builds on their $8.5 billion pledge made last year at COP26 in Glasgow.

Ramaphosa, on the other hand, told journalists that the grant component was quite low, at 2.7%. The remainder was made up of concessional loans and loans from commercial institutions.

He explained that South Africa informed its partners that it needed R1.5 trillion.

“We have communicated this to our partners and said because South Africa carries a sizable loan burden, which it has to service from its fiscus, we require more grant funding,” Ramaphosa said.
“Fortunately, that message seems to have been well received,” he added
South Africa’s debt burden is expected to be around R4.7 trillion this year, up from R577 billion in 2007/08.

Aside from the $8.5 billion, some IPGs have committed an additional R10 billion in resources, which includes concessional financing and grants.

According to Ramaphosa, the Just Energy Transition Partnership is “historic” and could serve as a model for other developing countries to improve or scale up.

Similarly, Ursula von der Leyen, President of the European Commission, described the Just Energy Transition Partnership as a “first-of-its-kind global initiative.”

“It is a flagship of EU-supported multilateral cooperation to limit global warming to 1.5°C.”

These sentiments were shared by France’s President Emmanuel Macron, who called it a “benchmark,” and US Treasury Secretary Janet Yellen, who called it a “groundbreaking” model for addressing the climate crisis.

South Africa has had a “good experience” so far at COP27, which began on Sunday, according to Ramaphosa.

COP27 has been dubbed the “African COP,” as developing countries will push for more funding to allow them to adequately respond to the climate crisis without increasing their debt burdens.