The United Nations' Green Climate Fund (GCF) has agreed to back the financing of renewables in South Africa. In a program called the Embedded Generation Investment Program (EGIP), the GCF will be joining the Development Bank of Southern Africa to support the economic ventures of South African renewable producers.
EGIP will especially help South African photovoltaic (PV) energy producers to underpin project revenues without needing to rely on the government. The program will provide credit to 330MW in projects, of which 280MW is PV and the rest is wind energy.
EGIP is meant to plug the funding gap left behind by South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The investment program will be a 20-year scheme requiring $537 million in funding. It is set to boost the bankability of independent power producers.
“This program will open new markets to independent power producers by enabling them to directly sell energy to industries and cities without sovereign guarantees.” GCF executive director Yannick Glemarec said.
EGIP will also support local-level energy producers, ranging from community trusts to small businesses, who seek to own clean energy projects in their areas.
GCF estimates EGIP could help around 11.2GW of clean energy projects that cannot turn to REIPPPP contracts despite being permitted and fully viable.
Header Image Credit: Khmer Times