Former Absa CEO Daniel Mminele has been appointed by President Cyril Ramaphosa to head a task team that will lead SA’s efforts to mobilise finance for a just transition of Africa’s most carbon-intensive economy, in line with an agreement reached with major economies late in 2021.
Mminele, who has been an independent nonexecutive director and chair-designate at Alexander Forbes Group since January, will lead the presidential climate finance task team, which will advise the government on the implementation of an $8.5bn (R131bn) funding agreement clinched at the COP26 conference in 2021.
SA’s cleaner energy policy calls for a reduction in carbon emissions while not imposing undue hardship on workers and communities.
The Presidential Climate Commission estimates that SA will need R300bn over 30 years to finance the just transition and says that most of this will have to come from the international community. It published a report, “Laying the foundation for a just transition framework for SA” last month, which emphasised that the government has a significant role to play in creating an enabling environment and to attract that investment.
The report says SA’s biggest opportunity for attracting international climate finance is in the transformation of the electricity system, specifically focused on decentralisation and decarbonisation. But this will be a challenge for SA, which relies on coal for 90% of its energy.
Mineral resources & energy minister Gwede Mantashe is committed to the country’s continued reliance on coal-fired energy for the foreseeable future and has touted nuclear power as an alternative.
In November 2021 SA entered into a partnership with the governments of France, Germany, Britain and the US, along with the EU. They committed to mobilise the initial amount over the next three to five years. The money will be raised through instruments, including grants and concessional finance, to support the implementation of SA’s nationally determined contribution to reducing emissions.
Mminele will work with the asset and liability division from the Treasury, the presidency said in a statement on Tuesday. The team will advise the cabinet on the offer’s “composition, affordability and alignment with our regulatory environment”.
The team will also “engage with partner countries; co-ordinate relevant government departments, development finance institutions and the private sector; and oversee the development of relevant financing mechanisms and facilities to enable the flow of international climate finance to support SA’s just transition in the electricity, electric vehicles and green hydrogen sectors,” it added.
Mminele was CEO of Absa until the end of April 2021 and served two terms as deputy governor of the Reserve Bank. His experience before working at the Bank included credit-risk analysis, corporate banking, and project and structured finance at private banking institutions in Germany, the UK and SA.
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