French development finance institution, Agence Française de Développement (AFD), and Eskom, on Monday signed a memorandum of understanding (MoU) to further affirm their commitment to the promotion and development of a competitive electricity sector. Part of the pact’s objectives includes AFD’s support for the development and implementation of Eskom’s “Just Energy Transition” strategy.
Eskom established the Just Energy Transition (JET) project office last year to spearhead the implementation of its “Just Energy Transition” strategy. The strategy involves repurposing Eskom’s older coal plants in ways that improve the utility’s sustainability and sustain livelihoods in coal mining towns. Eskom is looking to increase its renewable energy capacity as the utility is set to retire about 10 GW of its coal fleet by 2030.
The pact with AFD seeks to establish a framework to strengthen the current cooperation and collaboration between the two parties. AFD has committed R5.9 billion (EUR 340 million) in loans in support of Eskom projects over the past 14 years.
“We have had long lasting ties with our partner Eskom. We are confident that our close collaboration with Eskom will serve to enhance Eskom’s capacity to find sustainable solutions to the challenges it faces,” said French Ambassador to South Africa, Aurélien Lechevallier.
Eskom committed to the establishment of an electricity sector anchored on modern technology and low carbon emissions.
The AFD and Eskom MOU has the following objectives:
- Support for the implementation of the Namaqualand Strengthening Phase 2 project
- Support for the implementation of interventions to restructure Eskom’s business model, through a technical cooperation grant
- Identify potential collaborations for the energy transition to renewable energy, to mitigate social and environmental impacts, through innovative propositions such as the Just Energy Transition strategy
- Support the development of a Just Energy Transition strategy to advance Eskom’s aspiration for a lower carbon, socially inclusive future
- Facilitate dialogue between Eskom and strategic stakeholders around the Komati Power Station to consolidate visions on a just energy transition.
André de Ruyter, the Eskom Group Chief Executive, commented; “The Komati Power Station is amongst those in Eskom’s fleet of older power stations that we hope to use to light up a much brighter and more sustainable future under the Just Energy Transition strategy. In this brighter and more sustainable future of electricity generation, Eskom is encouraged by the continued support and partnership of the French people as represented by His Excellency, Ambassador Aurélien Lechevallier, and AFD. French institutions have always stood beside Eskom at key events in the development of the electricity industry in South Africa.”
Bruno Deprince, AFD’s Regional Director, also commented: “Eskom is a very important long-term partner to AFD, and hence we affirm our commitment to support the public utility’s transformation efforts.”