President Cyril Ramaphosa has described the Joint Working visit between Denmark and Netherlands as very opportune and important for forging closer cooperation, especially in the energy space.
Yesterday, 20 June 2023, the President hosted a joint working visit by the Prime Minister of the Netherlands, Mr Mark Rutte, and the Prime Minister of Denmark, Ms Mette Frederiksen in Pretoria.
The visit sought to solidify South Africa's relationship with the two countries in the areas of green hydrogen, renewable energy and just energy transition.
President Ramaphosa said that "Renewable energy forms an increasingly important part of our energy mix and is vital to both the achievement of a just transition and greater energy security. We hope to benefit from closer cooperation with your countries in this regard".
During the joint Official Talks, memorandum of understanding were signed between the Tripartite.
The Memorandum of Understanding signed were:
· The Memorandum of Understanding in the Field of Green Hydrogen between South Africa and the Netherlands led by signatories Prime Minister Rutte of Netherlands and Acting Minister of Electricity, Mr Mondli Gungubele.
· Amended Agreement between South Africa and Denmark regarding Development Cooperation concerning the Energy Partnership Programme 2017 led by signatories Minister of International Relations and Cooperation, Dr Naledi Pandor and Danish Ambassador to South Africa, Mr Tobias Rehfeld.
The visit also brought a substantial group of investors to South Africa to reinforce the high levels of cooperation and good relations between South Africa and two important European partners.
President and the Prime Ministers participated in a Denmark-Netherlands-South Africa Business Forum hosted by the Department of Trade, Industry and Competition (the dtic).
The Business Forum was held under the theme "Green Energy Transition and Green Hydrogen Partnerships for Impact" focusing on key areas in green energy and green hydrogen.
The engagements at the forum focussed in the green energy sector, increasing investment as well as partnerships and a social compact emerging from business and labour on skills. These also included roundtables discussions in greening of industry, port development, industrial development support, green mobility, fuel cells and electrolysers, and green energy generation.
The business seminar saw announcements on investments and partnerships from business and industry leaders from South Africa, Denmark and the Netherlands to enhance and increase trade and investment relations.
The Heads of State and Government witnessed the announcements of investment and partnerships between the three countries, namely:
1. The establishment of South Africa's first dedicated green hydrogen fund. The SA-H2 is an innovative blended finance fund that will facilitate and accelerate the development of a green hydrogen sector and circular economy in South Africa. The $1 billion Fund is supported by Climate Fund Managers and Invest International of Netherlands, Sanlam, the Development Bank of Southern Africa and the Industrial Development Corporation of South Africa.
2. The Public Infrastructure Fund for Water and Energy: Invest International intends to establish a concessional financing package fund for 300 million euro to finance public infrastructure projects in the water and energy sector. The fund combines loans at 200 million euro and grants of 100 million euro and will contribute to the Just Energy Transition. Jointly it offers a complete financial package to assist South Africa in the delivery of public infrastructure plans in the water and energy sector. After this announcement, concrete steps will be taken to sign an MOU to establish the fund and identify public infrastructure projects.
3. Climate Smart Horticulture Demo Facility (Just Energy Transition): The Just Energy Transition is an opportunity to create sustainable 21st century jobs. In addition to contributing to a climate neutral society, it will also pave the way to establish a healthy and sustainable environment for local communities. ESKOM in partnership with the Netherlands, has identified the Grootvlei Power Station and its surrounding areas as potential hubs for horticultural production, processing, packaging and distribution. The agro -hub would be just 100km south east of Johannesburg and Pretoria. Through this partnership with the Netherlands, the partnership will have the ability to produce healthy and affordable food and secure high tech jobs in the climate smart agriculture. The first phase is to establish a facility that demonstrates smart ways of farming that are immune to climate change. This climate smart Horticulture Demonstration facility is a bold first step. It can produce 50 hectares worth of food on just half a hectare of a greenhouse, creating 15-20 permanent jobs per hectare. This facility will be ready in the 4th quarter of this year.
4. Expansion of the South African Energy Partnership III (DEPPIII) Government Cooperation The Danish-South Africa Energy Partnership Program (DEPP) was initiated in 2011 with the aim of assisting South Africa in meeting the countries climate goals as set out in the Paris Agreement. The purpose of the bilateral cooperation is to further develop capacity in key energy areas in South Africa and contributions through Danish expertise. It has been decided to expand the current third phase of the government cooperation (DEPPIII) with an overarching structure consisting of three additional focus areas.
· Further development in the wind mapping with a particular focus on Mpumalanga.
· To support the development of offshore wind in South Africa, particularly with the modelling and ocean mapping with the opportunity to build capacity on the development of relevant industry and ports, local value chains in the offshore wind industry.
· Capacity building on electricity market structure, function, regulation, stakeholder roles and responsibilities as well as the unbundling of ESKOM and the expansion of the transmission grid.
· Copenhagen Infrastructure Investment (CIP) investment in Mulilo and the South African sustainable energy development -$200 million.
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Copenhagen Infrastructure Partners (CIP) was founded in 2012 and has developed in to be one of the world's largest fund manager of green field investments in green energy infrastructure. To date, CIP has raised 10 funds and 19 billion euro from more than 140 international institutional investors worldwide. The fund invests in greenfield renewable energy infrastructure projects. The investment in Mulilo Energy Holdings (Mulilo), a leading South African renewable energy developer based in Cape Town represents CIP New Market Funds first ever investment in South Africa.
5. Labour Market consortium on social dialogue and skills development between the Danish Confederation of Industries, 3 F workers union, NUMSA, NBI, SEIFSA, NUM, BUSA. The purpose of this compact agreement will be to collaboratively work with the various employer and social partners in establishing a framework and approach to identify the skills that will be required to promote a socially just and inclusive energy transition in South Africa.
President Ramaphosa said that he is enthused by the Netherlands and Denmark to work together with South Africa to strengthen and deepen economic relationships and become key trading partners in the green hydrogen, green energy sectors, skills development, mining and in manufacturing, advanced manufacturing, infrastructure and innovation.
The President has welcomed and thanked companies and institutions from the Tripartite for the investment announcements and partnerships; which will translate into economic gains and creating a business environment that is conducive to supporting trade and investment.
