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African Lender Has Plan to Raise $40 Billion to Cut South Africa's Coal Reliance

Bank plans facility to receive climate funding for continent

·         Funding should not result in more debt to South Africa: AfDB

The African Development Bank plans to help mobilize as much as $40 billion for coal-dependent South Africa’s transition to cleaner energy, part of a plan that it says won’t add to the country’s debt and could serve as a model for other nations.

The lender, which didn’t give details on how the money would be raised, has been meeting members of the Group of Seven rich nations  -- which pledged $8.5 billion last year for the most industrialized country on the continent to move away from the dirtiest fossil fuel -- to raise additional resources, Akinwumi Adesina, the AfDB’s president, told reporters on Friday.  

South Africa’s government has stressed a deal to use such funding will only be accepted if the terms are better than it would get from commercial borrowing. State-owned Eskom Holdings SOC Ltd., which generates almost all the nation’s power from coal-fired power plants, is reliant on state bailouts to pay interest on its 396 billion rand ($25 billion) of debt.