Baku: The Minister of Forestry, Fisheries and the Environment, Dr. Dion George, has made an urgent appeal for measures to reduce the high cost of capital, which is crucial for funding pathways towards a just transition in Africa. Speaking at the second annual High-level Ministerial Roundtable on the Just Transition at the Conference of the Parties (COP29) in Baku, Azerbaijan, Dr. George highlighted the challenges posed by the high cost of capital in Africa, which impedes the continent’s ability to capitalize on socio-economic opportunities associated with the transition.
According to South African Government News Agency, Dr. George pointed out that in 2021, the average cost of capital for energy projects in Africa was approximately seven times higher than in Europe and North America. He emphasized the need for coordinated efforts from governments, financial institutions, and businesses to eliminate the frictions that increase costs. The Minister criticized the current global financial system for its inabilit
y to adequately support developing economies in accessing the necessary scale and quality of finance to support their Just Transition Pathways and fulfill their Nationally Determined Commitments.
Dr. George further elaborated on the shared challenges faced by developing economies, which include limited fiscal space, high capital costs, debt burdens, restricted access to technology, and other hindrances. These factors, he noted, severely limit access to the economic opportunities that the transition presents.
Highlighting South Africa’s position, Dr. George stated that the country is at the beginning of its transition journey, with significant work ahead in shaping and implementing the necessary policies and actions. He underscored the importance of a just and equitable transition that empowers workers, communities, and society to lead the shift towards low-emissions and climate-resilient development.
South Africa’s National Framework on Just Transition aims to integrate fairness and equity into its mitiga
tion and adaptation strategies. This is reflected in the country’s new Nationally Determined Contribution (NDC) trajectory range, which aligns with the 1.5 degrees Celsius target while prioritizing equity and fairness.
For South Africa, Dr. George emphasized that transition pathways must generate sustainable jobs, improve livelihoods, and create opportunities for localized industrialization. These efforts are part of a broader transformative process aimed at fostering an inclusive and competitive economy.
In conclusion, Dr. George reiterated the importance of international cooperation and unlocking access to transition opportunities as central to achieving low carbon and climate-resilient development. COP29, where these issues are being addressed, is set to continue until 22 November 2024 in Baku, Azerbaijan.