The Green Climate Fund (GCF) will help drive down the price of renewable energy in South Africa by boosting the private sector’s investment in wind and solar power in a partnership with the Development Bank of Southern Africa (DBSA).

GCF signed an agreement today with DBSA to reduce the cost of investing in South African renewables on the sidelines of GCF’s second Private Investment for Climate Conference.

The GCF-supported programme, to be  implemented by DBSA, provides credit support to renewable energy projects – with a targeted capacity of 330 MW in solar and wind-generated power.

Speaking at the global gathering, which aims to strengthen the private sector’s role as a driver of climate action, GCF’s Executive Director Yannick Glemarec said the agreement highlights the importance of business-led efforts to reduce greenhouse gases.

“The ever increasing need to take climate action also offers profitable investment opportunities as firms find innovative ways to forge low-carbon economies,” he explained. “This programme will open new markets to independent power producers by enabling them to directly sell energy to industries and cities without sovereign guarantees.”

Mr Glemarec added that GCF’s partnership with DBSA is essential as local knowledge of business environments is key to removing barriers to low-carbon investment.

“DBSA is excited to partner with GCF on yet another ground-breaking climate finance initiative that enables the private sector to develop clean energy without requiring government guarantees. This will further enhance South Africa’s transition to a more sustainable, low-carbon economy,” said Mohale Rakgate, DBSA Group Executive for Project Preparation, when signing the agreement.

South Africa’s plan to increase renewable energy use is a vital part of its commitment to peak and then decline its emissions from 2025 to 2030 under its National Determined Contribution (NDC) of the Paris Agreement. This includes a move away from its reliance on coal, which currently supplies around 90 percent of the country’s electricity generation needs.

DBSA Group Executive for Project Preparation Mohale Rakgate, who joined Mr Glemarec in the agreement signing, said: “DBSA is excited to partner with GCF on yet another ground-breaking climate finance initiative that enables the private sector to develop clean energy without requiring government guarantees. This will further enhance South Africa’s transition to a more sustainable, low-carbon economy.”

South Africa’s planned increased use of renewable energy is a key part of its commitment to peak and then decline its emissions from 2025 to 2030 under its National Determined Contribution (NDC) under the Paris Agreement. This includes a move away from its current reliance on coal, which currently supplies around 90 percent of the country’s electricity generation needs.