State President, Jacob Zuma highlights SARi at the World Climate Summit in Durban

Ladies and gentlemen, As we noted, the biggest barriers to developing renewable energy in Africa to date are not technological, but financial. In that regard, South Africa has been hard at work in the development and design of financial instruments aligned to our national plans for green growth.

During the course of COP 17 we will be launching a key initiative that could kick-start major development for renewable energy generation and industrial development. The South African Renewable Initiative (SARi) funding mechanism will help us unlock South Africa’s green growth potential through the funding of large-scale renewable developments. This will be achieved with the assistance of global partners – donors and Governments, who will provide innovative funding solutions to facilitate it. Renewable energy still costs more than non-renewable energy, which in South Africa is largely supplied by cheap, abundant coal supplies. It is estimated that the renewables’ targets indicated in our Integrated Resource Plan 2010 would add an average incremental cost of around 660 million US dollars to South Africa’s annual electricity bill up to the year 2044. The SARi model will enable us to deal with the high cost through low cost loans and other financial instruments combined with time limited pay-for-performance grants.

ADDRESS BY HIS EXCELLENCY, PRESIDENT JACOB ZUMA, DURING THE WORLD CLIMATE BUSINESS SUMMIT ON GREEN BUSINESS GENERATION, ELANGENI HOTEL, DURBAN 03 December 2011

Ministers and Deputy Ministers; CEOs of various organizations, local and international; Members of the Business fraternity; Esteemed guests; Ladies and gentlemen: Good morning:

We appreciate this opportunity to meet with the business sector during this 17th Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP17) serving as the seventh meeting of the parties to the Kyoto Protocol.

The theme of COP 17,Working Together: Saving Tomorrow Today reminds us that it is not only governments that have a responsibility to build a sustainable future. The business sector has a key role to play too, alongside other key sectors of society. Your interest in these climate change talks as business indicates your understanding that climate change is more than just an environmental issue. It is about the continued existence of the human species in harmony with its environment in a sustainable manner. Climate change is already having a serious impact on Africa and many parts of the world. Changing weather patterns are affecting the environment, health, natural resources, shelter, infrastructure such as roads, bridges or dams, and even food production. The negotiations are a party-driven process. South Africa, as COP President represented by our Minister of International Relations and Cooperation, is playing an enabling role for parties to find agreement on the salient issues of climate change. As South Africa, we seek a global regime that ensures that climate change does not reach dangerous levels, while recognising that the priority for developing countries is to address poverty and socio-economic development. The talks have to produce a multilateral climate change regime that is fair, credible, balanced, inclusive and effective.

Thus far, talks are going well. Parties still differ on a number of issues. We think this is normal especially during the first week of the conference, ahead of the start of the high level segment next week.

Ladies and gentlemen: The climate change talks are taking place against the background of yet another economic crisis in the developed world, which is likely to impact on most parts of the globe. The situation in some parts of Europe is serious and the rest of the globe will feel the impact, more so the developing world. The economic crisis occurs during a period when the world is already facing rising food and fuel prices, extreme and unusual weather conditions due to climate change, energy insecurity, poverty, youth unemployment, and continued economic volatility.

The situation calls for us to find economic solutions that attend to the needs of our planet. New sources of growth and innovation, and new technologies and models for driving investment are urgently needed to deliver long-term prosperity in a stable, sustainable and inclusive way. It is in this context that we promote a green economy and green growth. A Green Economy is one in which business processes are configured or reconfigured to deliver better returns on natural, human and economic capital investments, while at the same time reducing greenhouse gas emissions, extracting and using fewer natural resources, creating less waste and reducing social disparities. Thus, a Green Economy grows by reducing rather than increasing resource consumption. We have committed ourselves to our people as a government to work towards an inclusive, green, and sustainable growth. The inclusive nature of the growth is a key focus in our country as we come from a history of political and economic exclusion of the majority of the population during the pre-1994 period of apartheid and colonial oppression.

New ways of doing things, like promoting sustainable development and green growth provide an opportunity for South Africa to expand its push towards an inclusive growth and an economy that includes and caters for the needs of all of our people. Meaningful economic transformation is therefore an integral part of our quest for a sustainable economy that responds to the impact of climate change. We emphasise this because developing green economies is not just about eco-efficiency but also about equity. Experience shows that growth does not in itself necessarily overcome exclusion and marginalization. For as long as people lack adequate education and healthcare, infrastructure, access to land, capital, finance and market institutions, they simply cannot take advantage of growth, green or not. They are trapped in a vicious cycle of poverty. Instead of broad development, the benefits of growth end up captured by a relatively small number of people. The inclusive and sustainable growth that we seek has a number of dimensions. We define it as growth that ensures adequate incomes to workers to address the needs of their families. This puts decent work at the centre of our efforts to build a more inclusive green economy. We refer to growth that promotes rural development and connects the rural population to the mainstream economy. We refer to growth that promotes strong local economic empowerment, so that our people see tangible benefits in the expansion of goods and services. In the case of South Africa, it means ensuring the economic empowerment of the black majority. We refer to growth that addresses gender inequalities, so that women can find real opportunities in the economy. Inclusive and sustainable growth also refers to growth that draws in young people so that we do not have a young generation without hope and opportunity. It also refers to growth that is combined with respect for basic rights, such as health, safety and trade union rights in the workplace. Sustainable green growth must also include improved access to quality education and skills. It must also bridge the digital divide so that the children of the poor can also gain access to the information and communication technology skills that are so crucial in the modern economy. We are addressing the need for balanced, green and inclusive growth through our government’s New Growth Path framework which places employment at the centre of our efforts. For the African continent, this opportunity of driving green and inclusive growth requires that we leapfrog from being just a producer of raw materials. Africa has to build dynamic and competitive manufacturing sectors that do not just export raw materials but which process the minerals and agricultural products into consumer goods.

Today we invite you to partner with South Africa and Africa on the road towards inclusive, shared, sustainable and greener growth. The South African Government is already implementing strategies towards cleaner technology and transition towards a low carbon future, guided by our recently adopted National Climate Change Response Policy. Having said this, we are very mindful of the fact that South Africa finds itself in a situation in which it is both a high emitter of greenhouse gases, as well as a country extremely vulnerable to the impacts of climate change. We are the largest producer of electricity in Sub-Saharan Africa, generating 90% of our electricity from coal. As a responsible global citizen, we remain fully committed to contribute our fair share to the global effort to reduce greenhouse gas emissions. However, given our developmental challenges, we will continue the use of fossil fuels in the short to medium term while transitioning to a low-carbon economy, over the long term.

It was with that visionary approach in mind that on the eve of the Climate Change Summit held in Copenhagen, we announced our commitment to reduce our carbon emissions by 34% by 2020 and by 42% by 2025. This was to be done in the context of a comprehensive, fair and effective legal binding multilateral agreement that delivers financial and technology support for our action. However we are not waiting for an agreement in Durban before achieving green, sustainable and inclusive growth. We are forging ahead with our programme of greening the economy to improve the economic, social and environmental resilience of the country in the face of climate change. Africa and many developing countries boast most exciting opportunities for green growth, by virtue of their largely abundant natural resources.

There are many initiatives that we can pursue together to protect the future, while not destroying industries and jobs. With the development of wind, solar and other renewable energy technologies, energy efficiency and even electric vehicles, we are now witnessing the growth of new green industries. There are vast opportunities for investments in the fields of renewable energy, marine aquaculture development, wildlife management, waste services as well as ecosystem rehabilitation programmes to name just a few. We are promoting investments in all these sectors. We have an ambitious renewable energy plan.

We will soon announce the results of the bidding process for the first 3.725 megawatts of green energy to be procured under our Renewable Energy Flagship Programme over the next few years. Over the next twenty years we plan to scale this up to at least 18 Gigawatts, to account for 42% of new capacity being commissioned. Last month, South Africa and the Democratic Republic of Congo signed an Agreement for the construction of the Grand Inga Dam that will provide electricity to more than half of Africa’s population.

Ladies and gentlemen, As we noted, the biggest barriers to developing renewable energy in Africa to date are not technological, but financial. In that regard, South Africa has been hard at work in the development and design of financial instruments aligned to our national plans for green growth. During the course of COP 17 we will be launching a key initiative that could kick-start major development for renewable energy generation and industrial development. The South African Renewable Initiative (SARi) funding mechanism will help us unlock South Africa’s green growth potential through the funding of large-scale renewable developments. This will be achieved with the assistance of global partners – donors and Governments, who will provide innovative funding solutions to facilitate it. Renewable energy still costs more than non-renewable energy, which in South Africa is largely supplied by cheap, abundant coal supplies. It is estimated that the renewables’ targets indicated in our Integrated Resource Plan 2010 would add an average incremental cost of around 660 million US dollars to South Africa’s annual electricity bill up to the year 2044. The SARi model will enable us to deal with the high cost through low cost loans and other financial instruments combined with time limited pay-for-performance grants.

Ladies and gentlemen, In promoting this new green, sustainable and inclusive growth focus, we are putting together some policy proposals that will impact on the business sector. These may include putting a price on carbon and other pollution or on the over-exploitation of a scarce resource through mechanisms such as taxes, natural resource charges or tradable permit systems. We would also have enablers or incentives such as recognition for eco-labeling systems. These are some of the issues we will continue discussing with business in our social dialogue forums. Already we have an innovative Green Economy Accord that we signed with business and labour, indicating the seriousness with which we all regard the need to move towards a green economy. Ladies and gentlemen, It is vitally important for nations to come to an agreement at COP17 to ensure that emerging nations are not burdened by penalties that make them uncompetitive. We thank you for supporting the COP 17/CMP7 process.

Let me reiterate that we see in the threat of climate change, an opportunity to develop our green, inclusive, sustainable and shared growth. This would be growth that provides jobs and which improves infrastructure, health, education and all basic services that our communities need to have an improved quality of life. We also see in the response to the threat of climate change, an opportunity for meaningful economic transformation that will create an inclusive economy to contribute to the building of a better life for all. We will be partnering with the business community as we move forward to this new trajectory. I thank you.

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