USTDA expects to support project preparation for South Africa’s just energy transition

12 August 2022

Source: https: Engineeringnews

US Trade and Development Agency (USTDA) believes it is well positioned to feed projects into the Just Energy Transition Partnership (JETP), which was established between South Africa and several developed countries, including the US, in 2020, and which is expected to progress towards implementation later this year.

The JETP includes an initial offer of $8.5-billion – to be provided by France, Germany, the US, the UK and the European Union – to help fund South Africa’s transition from coal to renewables, while protecting workers and communities reliant on the coal value chain.

South Africa is currently working on an investment plan that will be made up primarily of projects in the electricity sector, but which will also include some electric vehicle and green hydrogen projects. The plan is expected to be approved ahead of the upcoming COP27 climate conference to be held in Sharm el-Sheikh, Egypt, in November.

USTDA director Enoh Ebong tells Engineering News that the agency’s activities in South Africa, as well as the rest of the continent, are already largely aligned with the JETP, with feasibility studies being pursued, or technical support being provided, for renewable energy, smart-grid and battery storage projects in several countries.

“So, we are well situated to feed projects into the initiative, with the view to mobilising some of that financing,” Ebong said during an interview in South Africa that coincided with a visit to the country by US Secretary of State Antony Blinken.

In addresses made during his visit, Blinken emphasised the role that infrastructure could play in advancing the President Joe Biden administration’s new Africa strategy.

Blinken said the US was committed to raising $200-billion towards the G7’s $600-billion ‘Partnership for Global Infrastructure’ and that it was already implementing projects that were focused on health, digital infrastructure, empowering women and girls, energy, and climate.

“The way this infrastructure is built will reverberate for decades.

“After all, we’ve seen the consequences when international infrastructure deals are corrupt and coercive, when they’re poorly built or environmentally destructive, when they import or abuse workers, or burden countries with crushing debts.

“That’s why it’s so important for countries to have choices, to be able to weigh them transparently, with the input of local communities without pressure or coercion,” Blinken said in an address made in Pretoria in which he outlined the US’s new African strategy.

Ebong met with the leadership of Eskom during her visit and confirmed that much of the discussion had focused on ways that American companies could support the management of South Africa’s transmission infrastructure, including through the use of artificial intelligence.

The issue of clean energy, as well as transport and digital infrastructure, also featured prominently during the US-South Africa Strategic Dialogue, which was reconvened in Pretoria on August 8 for the first time since 2015 and which attracted over 50 US policymakers and officials.

Ebong co-chaired a session on infrastructure with Dr Kgosientsho Ramokgopa, who is head of the Investment and Infrastructure Office in the Presidency.

The issue of protecting the physical assets of the South African rail industry featured prominently along with the development of an inclusive digital infrastructure.

Ebong indicated that the discussions were likely to stimulate future feasibility studies that the USTDA would fund to improve the portfolio of bankable projects in South Africa and into which American firms are likely to bid to provide goods and services.

“I think that South Africans should look to more projects being announced and grants signed as a result of these discussions.”

The agency spends about $24-million yearly in Africa to support feasibility studies, to provide technical assistance and to conduct reverse trade missions, with a green-hydrogen focused mission to be hosted in the US in November.

“By focusing on project preparation, we are able to catalyse infrastructure projects worth billions.

“Our current global portfolio stands to be able to catalyse $17-billion in financing,” Ebong highlighted.