A group of wealthy nations and multilateral development banks have promised to mobilise €2.5 billion to help Senegal reduce its dependence on fossil fuels, President Macky Sall said on June 22nd. "Senegal has committed to increasing the share of electricity generated by renewable energy to 40% by 2030 with financing to the order of €2.5 billion," equivalent to US$2.7 billion, Sall told a roundtable at the two-day Summit for a New Global Financing Pact in Paris.
Currently, just over 30% of power comes from renewable sources, but that is based on "unfavourable loans," Sall said. Senegal has one of the highest electrification rates on the continent at 78.6%, but it relies on fossil fuel imports from abroad, and the high electrification rate masks profound disparities – across urban and rural areas, geographies, and income groups, according to the World Bank (10/03/2022).
The deal with Senegal - underwritten by France, Germany, Britain, Canada and the European Union - is the latest in a series of so-called Just Energy Transition Partnerships (JETP).
The first of these types of arrangements, announced at the CO26 climate conference 2021, saw $8.5 billion promised to help South Africa wean itself off coal-fired power, but observers have raised concerns that the deal is too reliant on loans rather than grants.
Other deals with Indonesia ($20 billion) and Vietnam ($15.5 billion) followed.
"The renewables target that Senegal have proposed is a good idea, we don't want them to be locked into long term dependence on gas," said Ronan Palmer, an analyst at climate think tank E3G. "But the finance providers for Senegal's JETP have to very carefully avoid the mistakes made in South Africa," he added. "This should not be a mechanism for more debt."
The €2.5 billion will cover a package of grants, subsidies, concessional loans, export credits and technical assistance over an "initial period" of three to five years, according to a joint statement by Senegal and its JETP partners. More financing may be mobilised during and beyond this period to support Senegal's ambitions, it added.
The joint declaration also called on the signatories to be aware of the specific and global challenges facing Senegal, including unemployment, access to electricity and its cost, the country being highly exposed to the impacts of climate change while contributing marginally to global greenhouse gas emissions, and being committed to ensuring universal access to affordable electricity and developing its industrial sector, in line with the African Union's Agenda 2063.
"The current global financing system is not adequate," said Sall, who also bemoaned the cost of credit, calling on multi-lateral development banks to take into consideration current issues such as climate change and the high debts of low-income countries. Nations supporting the deal have pledged to help line up further funding from multilateral development banks and the private sector.
Senegal has not forsworn fossil fuel development, saying it "intends to use its natural gas resources as a transitional energy." While the economies of other JETP countries are heavily reliant on coal to generate power, Senegal uses mostly heavy diesel fuel oils.
On June 20th Sall vowed to strengthen "democracy and freedom" in his country, in his first public reaction to deadly unrest in early June sparked by the conviction of a popular opposition leader, that has shaken the West African state's image for stability.
At least 16 people were killed, according to the authorities. Amnesty International puts the toll at 23, and the opposition at 30.
"Our economic profile has become very attractive. This year we are going to start extracting oil and gas," he said during a state visit to Portugal. "That may also be the reason for all this frenzy."
(Sources: © Agence France-Presse 22/6; Senegal signs mega green energy deal with G7 nations and the EU (23/6) https://www.esi-africa.com/; https://link.foreignpolicy.com/)
South Africa's Deal
South Africa's JETP is not going entirely to plan in the face of continuing shortages of electricity and power cuts, known as load-shedding, for up to ten hours a day. The cuts have significantly worsened over the last year, angering citizens and businesses and damaging Ramaphosa's popularity ahead of elections next year. Ageing and unreliable coal-fired power plants frequently breaking down and state-owned energy company Eskom's dire financial situation have been blamed for the crisis.
The government is considering whether to extend the life of its 14 existing coal power plants, rather than replace them with renewable energy sources according to the terms of its JETP agreement. South African President Cyril Ramaphosa told parliament in late May that the timetable to shift away from coal "must be relooked at" while the country struggles with the daily blackouts.
He told the National Assembly that "we will transition to cleaner energy but at our own pace and own time". "We have got to do it, taking into account the needs of our people and the requirements of energy security", he added.
The type of financing offered has been another continuing sticking point in the agreement, with grants make up only 3% of the package. The rest is loans, raising concerns about South Africa's debt burden. Just over half of the funding is earmarked as concessional loans, with better-borrowing terms than South Africa can access on the open market.
A spokesperson for the German development ministry told climate change website Climate Home the group of rich countries behind the JETP show "understanding for the current emergency and sees the need for short-term measures" in South Africa. But they also warned against backsliding on the coal to clean energy transition: "A clear commitment by the South African government to long-term emission reduction strategies is and remains an important component of our cooperation".
Like South Africa, Germany itself has kept coal plants open for longer than it wanted because of a short-term crisis. After Russia invaded Ukraine, Germany and the rest of Europe sought to drastically reduce their reliance on Russian gas. To ensure that the supply of electricity met demand over the winter of 2022, Germany temporarily re-opened two coal power plants. Overall though, the crisis has sped up Europe's transition away from fossil fuels to renewables.
(Source: Rich nations "understanding" of South African delay to coal plant closures
(22/05/2023) https://www.climatechangenews.com )
No comments:
Post a Comment