South Africa's finance ministry has appointed a consultant to develop a plan by August that would enable state utility Eskom to receive loans aimed at reducing its carbon emissions. This move comes after the government prohibited Eskom from taking on new debt. Wealthy nations, including the UK, France, Germany, the EU, and the US, pledged $8.5 billion at the UN climate talks in November 2021 to assist South Africa in cutting emissions and transitioning away from coal, which currently dominates its electricity generation. Over $3 billion of this funding was earmarked for Eskom, which has been plagued by aging infrastructure and crippling debts, leading to severe blackouts.

However, in February, the government imposed conditions on Eskom, allowing it to assume some of the utility's debt but forbidding it from taking on additional loans for three years, except with written permission from the finance minister. As a result, the green funding promised by international donors remains uncertain. The South African treasury and President Cyril Ramaphosa's office have now engaged an unnamed consultant to find a solution that would enable the disbursement of the $8.5 billion without negatively affecting Eskom's balance sheet. The treasury intends to present a report on potential solutions by August.

South Africa is currently facing its most severe energy crisis, experiencing daily planned power outages due to electricity supply shortfalls. Eskom, responsible for over 80% of the country's power through coal-fired plants, needs significant investment in its transmission grid, estimated at over $7 billion by 2027. This upgrade is crucial to accommodate more renewable energy sources and potentially decommission three power plants. The government is reviewing the decommissioning schedules to address the electricity demand. The Climate Investment Funds (CIF), contributing $3 billion, reaffirmed its commitment to supporting South Africa's transition to cleaner energy.