EU donates millions more as SA says it can’t afford to climate-proof infrastructure | Business

Deputy Finance Minister David Masondo. (Ziyaad Douglas, Gallo Images)

South Africa’s cash-strapped government can’t afford to fund
the development of infrastructure that can withstand the impact of global
warming and has to look beyond the national budget to come up with the money it
needs, the country’s deputy finance minister said.

“The frequency of natural disasters and the results
thereof are felt daily in South Africa,” David Masondo said at a
conference in Johannesburg on Monday. “The fiscus cannot afford to
financially support the amount of investment required for climate-resilient
infrastructure.”  

His remarks followed the signing of an agreement whereby the
European Union will contribute 2 million euros (R42 million) toward an economic
programme in southern Africa that includes an infrastructure development
component.

The EU previously provided 673 378 euros in funding for a
first phase of the programme.South Africa has experienced a significant rise in
climate change-related natural disasters over recent years, with the eastern
KwaZulu-Natal province and other areas experiencing devastating flooding on a
more frequent basis.

The government has undertaken various measures, including
setting up an infrastructure fund that’s administered by the Development Bank
of South Africa and includes a portfolio of blended finance projects, but more
innovative funding mechanisms such as green bonds and carbon credits need to be
explored to respond to climate change, according to Masondo. 

The nation is constrained by its high levels of debt, a
problem that confronts many other African nations. 

“Africa as a continent needs an annual investment of
$190 billion for its clean-energy transition,” Masondo said.

“Fifty-seven percent of African countries are in debt
and they’re spending so much money on debt-service costs” that they can’t
undertake investments in climate change or in climate-resilient infrastructure,”
he said.