African countries should not be forced by rich nations to abandon fossil fuels while they adapt to — and mitigate — the effects of climate change, said Standard Bank CEO Sim Tshabalala.
In response to a question posed during the just energy transition session held at the Brics Business Forum on Tuesday, Tshabalala said African countries want to see the issue of compensation feature on the agenda when the UN Climate Change Conference (COP30) takes place in Brazil in 2025.
Africa’s forests are important carbon sinks, taking up more carbon from the atmosphere than they produce — a service for which the rest of the world should be compensating Africa, he said.
“We also need to insist on the right of African nations to use resources to mitigate and adapt to climate change, including by using fossil fuels.
“We recognise the need for us to mitigate and adapt, but we insist this has to be done in a fair and equitable way for the people of SA and the rest of Africa.”
Tshabalala said Standard Bank recognises that the world has already warmed by 1.1˚C since the end of the 19th century and carbon dioxide emissions have increased exponentially.
“There is no question if you look at the reports from the Intergovernmental Panel on Climate Change that the science is saying the environment is changing and getting warmer.
“But it is imperative, on the basis of the Paris Agreement, for us as Africans to insist on differentiated but common commitments that will give effect to a just transition.”
We recognise the need for us to mitigate and adapt, but we insist this has to be done in a fair and equitable way for the people of SA and the rest of Africa
— Sim Tshabalala, CEO, Standard Bank
Since the beginning of the year, Standard Bank has raised R83bn for renewable energy projects and it has a target of R250bn by 2026, Tshabalala said. Already the bank’s ratio of financing for renewable versus fossil fuel-powered energy projects is roughly 4.5 to 1.
In its insurance and asset management business, the bank holds about R13bn of assets under management to support renewable energy projects.
In addition, he said, the bank has raised a loan of R250bn from the International Financial Corporation; half of it will be for investment in “green” projects.
Aleksei Kechko, head of strategy at Russian development finance institute VEB.RF, said Russia wants COP30 to serve as a platform for the development of a new system of “green finance”. Commitments made by rich nations during the Paris round of climate negotiations in 2015 — to honour the 2009 commitment to mobilise $100bn a year in climate finance for developing countries — have not been realised.
“In Paris, developed countries committed themselves to help developing countries to finance their just transitions. They have backslided on this; they are not providing sufficient [financial support]. In 2025, we will have to build a new system of green finance and agree on more transparent financing that includes not just credit, but also subsidies to developing countries,” Kechko said.
Baoan Xin, executive chair of the State Grid Corporation of China, said participating countries at COP30 should discuss the need for technology and information sharing.
“Transition in the energy sector needs to come from a policy-level change. We need to make sure there is technological advancement which will advance the energy transition, and we need to share globally those technological advances which will push forward the energy transition,” he said.
Nishant Arya, vice-chair and MD of India’s JBM Group, which manufactures buses and electric vehicles, said India has embarked on a programme to install 500GW of renewables by 2030 and 1,000GW by 2047.
The country’s automotive industry is ramping up production in the electric vehicle value chain. A focus on replacing internal combustion engine buses, which provide transport to about 90% of people in India, with electric buses will make a significant contribution.
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