Eskom Eschews $2.5 Billion of Cheap Loans as Climate Pact Founders - Bloomberg
Climate Pact Founders as South Africa's Eskom Eschews $2.5 Billion of JETP Loans - Bloomberg
Eskom Eschews $2.5 Billion of Cheap Loans as Climate Pact Founders
- South African Treasury hinders utility from taking on debt
- Landmark JETP climate finance pact has ground to a halt
South Africa’s state power utility has failed to tap $2.5 billion of cheap loans to build critical transmission infrastructure that would help end the country’s crippling energy crisis.
That’s brought a landmark climate finance agreement — the Just Energy Transition Partnership — to a virtual halt, and extends the country’s reliance on coal plants. Finance ministry pressure on Eskom Holdings SOC Ltd. to not take on new debt and a lack of clarity on how private investors can participate are hindering the deployment of about $7 billion of energy financing, according to a US Treasury official and six other people familiar with the situation.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”