The CEOs of South Africa’s state owned development finance institutions (DFIs), the Development Bank of Southern Africa (DBSA), the Industrial Development Corporation (IDC), and the National Empowerment Fund (NEF) have established the DFI CEOs Forum – a platform with an objective to mobilise financing for the country’s just transition.
“The overall objective of the DFI CEOs Forum is to strategically locate, define and execute the just transition financing role of DFIs in South Africa, including assuming conceptual leadership roles through ideas and actions that contribute to the global discourse on transitioning towards low carbon economies and climate resilient societies,” the DFIs stated in a joint statement.
The DFI CEOs Forum announced that it is setting up a work programme to be implemented by the DFI Just Transition Task Team to be made up of executives from each of three DFIs. “The Forum is open to all public national and provincial funds, DFIs and fund managers in South Africa,” said the DFI CEOs Forum.
The DFIs conceptualised three workstreams to frame the work programme of the technical working groups. Workstream 1 will seek to define the strategic thrust of South African DFIs, and their role in the decarbonization journey of South Africa’s economy.
Workstream 2 will seek to understand the financial impacts and opportunities associated with the transition, as well as map strategic options for mobilizing climate finance to a low carbon economy and climate resilient society in South Africa by 2050.
“This workstream is expected to detail conceptual leadership programmes and projects, drawing on existing leads and experience from investment opportunities and green corridors that respond to the objectives of the DFI Forum. This should include a deliberate consideration of the vulnerable sectors and groups, such as the SMEs, as well as women and youth,” said the DFI CEOs Forum.
The third Workstream is expected to coordinate the participation of DFIs and other public funds or fund managers in the national carbon credit markets.
Collaborating with public and private institutions
“A clear collaboration plan with private and public sector institutions must be outlined for implementation. This will include a review of the Carbon Disclosure Methodology programme with a view to play a role in influencing South Africa’s policy and regulatory environment on carbon markets. The UNFCCC registry can also be explored for benchmarking purposes and to ensure collaboration and alignment with the international community,” the DFI CEOs Forum added.
The DFIs will also collectively and individually support the endeavours of South Africa’s Presidential Climate Commission (PCC). The PCC developed a Just Transition Framework (JTF) which seeks to present an over-arching set of principles, and strategic guide for all stakeholders to accelerate South Africa’s just transition to a lower carbon economy.
“There is an emerging consensus that the decarbonisation of South Africa’s economic structure will require fundamental and deep transformation of the economic base in the country. Recent flood events, now acknowledged to be at least partly due to climate change, in KwaZulu-Natal have shown that a far-reaching adaptation and socially just transition is an imperative in South Africa,” the DFIs said.
“There is now consensus that immediate attention is required to decarbonise the electricity system, with a focus on decommissioning and repurposing Eskom’s coal-fired power stations, upgrading and extending the grid, and a rapid ramp-up of new renewable projects,” the DFIs concluded.
