Meridian Economics has formulated a plan to create the world’s largest green energy financing initiative in South Africa. The government of South Africa is currently reviewing the proposed plan, the media said.
The media said that a host of finance institutions, climate funds and philanthropic organisations have shown interest in the initiative. South Africa’s green energy initiative at its early stages is aimed at establishing a $11 billion facility braced by finance institutions and private investors.
Meridian Economics carries regulatory expertise — and helps clients with infrastructure and strategy. South Africa is in a need to lower carbon footprint and revive the debt-ridden electricity public utility Eskom.
The new facility will lend financial aid to Eskom on a condition that it will speed up the process of shutting down its coal plants. Eskom will receive loans from the proposed facility in segments over a five year period and is expected to repay them over 20 years. The borrowed funds will be used to cover Eskom’s debt and future financing requirements.
Emily Tyler, a climate economist at Meridian, told the media in an interview, “This would be the largest and most significant global climate finance transaction to date. It would propel South Africa to a cleaner and more resilient energy future.”
Currently, Eskom supplies 95 percent of South Africa’s electricity. It has approached the government for financial assistance after adding up $42.20 billion in debt.
South Africa President Cyril Ramaphosa said that the government is effectively addressing issues specific to Eskom. A few months ago, he mentioned that the utility will be divided into three units.