Climate Investment Funds (CIF), a multilateral investor in developing countries, pledged to allocate USD1bn to help South Africa and Indonesia shift from coal to clean power, as reported by Reuters on October 27. South Africa and Indonesia can each receive USD500m in cheaper, risk-bearing capital from CIF’s Accelerating Coal Transition (CIF ACT) investment program. With the investment, Indonesia’s state utility Perusahaan Listrik Negara (PLN) and other investors will retire up to two gigawatts (GW) of coal-fired power five to ten years in advance, plus launch a pilot scheme to convert retired coal assets into renewable energy or battery storage projects. Meanwhile, South Africa will use the funding to replace several coal-fired power plants with renewable energy and energy storage systems. The act in South Africa could avoid 71m tons of greenhouse gas emissions a year, according to CIF.
The investment program was launched one month ahead of the 27th United Nations climate summit (COP27) in Egypt, where world leaders are set to discuss action to tackle climate change. At the COP15 summit in Copenhagen, rich nations made a commitment to provide USD100bn a year to developing countries by 2020 to help them adapt to climate change and mitigate further rises in temperature. The ten countries most affected by climate change are in Africa, while Africa only accounted for around 3% of the global carbon emissions. Nevertheless, rich countries have yet to fulfill their pledges, with only USD80bn delivered to less-wealthy nations in 2019. The upcoming COP27 will raise the question of whether wealthy nations should raise the USD100bn annual investment target from 2025.