The Minister of Forestry, Fisheries and the Environment, Dr Dion George, has called for urgent action to reduce the cost of capital to fund pathways towards a just transition.
Addressing the second annual High-level Ministerial Roundtable on the Just Transition at the Conference of the Parties (COP29) in Baku, Azerbaijan, the Minister said the high cost of capital in Africa is inhibiting the continent's ability to access the transition's socio-economic opportunities.
"In 2021, the average cost of capital for energy projects was about seven times higher in Africa than in Europe and North America. Reducing the cost requires coordinated efforts from governments, financial institutions and businesses to remove frictions, which add costs.
"The current global financial system is not designed to respond appropriately and developing economy countries cannot access the scale and quality of finance required to support their Just Transition Pathways and meet their Nationally Determined Commitments.
"As developing economy countries, we have shared realities that constrain our abilities to transition. We face a lack of means of implementation, limited fiscal space, high costs of capital, debt burdens, limited access to technologies and other factors. Critical within this is the lack of access to the transition's economic opportunities," George said.
He said South Africa stands at the beginning of its transition journey, with much work ahead in shaping and implementing the necessary policies and actions.
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"At the heart of all our climate actions is a steadfast commitment to ensuring a just and equitable transition, one that empowers our workers, communities, and all of society to define and drive the journey toward low-emissions and climate-resilient development.
"Our National Framework on Just Transition is designed to embed fairness and equity into our mitigation and adaptation strategies. This is reflected in the formulation of our new Nationally Determined Contribution (NDC) trajectory range, which aligns with the 1.5 degrees Celsius goal while ensuring that equity and fairness remain at the forefront," the Minister said.
George said for South Africa, transition pathways must create sustainable jobs, enhance livelihoods, and generate opportunities for localised industrialisation, moving towards a genuine transformative process that supports an inclusive and competitive economy.
"In our collective commitment to achieve low carbon and climate resilient development, international cooperation and unlocking access to transition opportunities remains at the core," George said.
COP29 is currently underway until 22 November 2024 in Baku, Azerbaijan.
