At the United Nations climate summit, South Africa is hoping to secure an $8.5 billion climate aid package, 80 percent of which it wants to use to build an electrical vehicle industry. The landmark funding plan unveiled at last year’s climate conference in was proposed and earmarked to help one of Africa’s biggest economies to become less dependent on fossil fuels.
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Talks subsequently slowed down due to disagreements about how the money should be used, as it was meant to serve as a prototype for other developing nations on how to transition to cleaner energies. However, the proposed spending plans didn’t fill the investors with confidence. The US, UK, Germany, France and the EU, which are providing the funds, want them almost entirely invested in replacing the country’s coal-fired power plants with renewable energy. But the SA government wants to use a large proportion of the funds to build an EV manufacturing industry locally.
In total, the plan suggests R128 billions of spending on electric vehicles with some of that money going on industrial development and innovation programs, someone close to the negotiations have said. The auto industry in South Africa is one of the bright sparks in the manufacturing sector, and brings in a lot of foreign exchange to our shores. Therefore, government want to build the same kind of capabilities for global brands that look for good manufacturing partnerships of its new electric vehicles.
The private sector and other rich nations and lenders are expected to provide more finance once the current deal is sealed.
South Africa’s Department of Trade, Industry and Competition, which has been pushing the electric vehicle program, referred queries to the Presidential Climate Finance Task Team, which didn’t respond to a request for comment.
A US Treasury Department spokesperson didn’t immediately respond to a request for comment and the UK’s Department for Business, Energy & Industrial Strategy didn’t reply to an email or answer calls to its press office.
