(Bloomberg) -- A global organization backed by Amazon Founder Jeff Bezos’ climate and biodiversity fund said it’s setting up a program to attract investment into South African municipal power grids, which need 319 billion rand ($18 billion) to prepare for the introduction of more renewable energy.
The Global Energy Alliance for People and Planet, or Geapp, will work alongside partners to prepare projects for investment to repair and upgrade dilapidated grids, said Ziyad Cassim, the group’s South African country representative.
“We will shortly announce a coalition of partners who are going to support us in the municipal space,” Cassim said in an interview. “We have three partners who are going to co-invest with us.” He decline to identify them because an official announcement is yet to be made.
South Africa’s drive to cut its dependence on coal, which accounts for about four fifths of its power generation, has been slowed by an inadequate power transmission and generation network and the absence of projects able to accept investment. A $9.3 billion climate finance pact with some of the world’s richest nations that was announced in 2021 has distributed less than 20% of that amount as a result.
The government, which ran electricity generation and transmission as a monopoly for decades, has now allowed significant investment in power plants and is preparing to accept private investment into transmission. Municipalities are expected to follow suit by seeking investment in their distribution grids.
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Municipal grids need to adapt from solely accepting electricity supply from the coal-dependent national utility to connecting to a variety of power sources as more solar and wind power plants start up.
Geapp — which was founded in 2021 by the Bezos Earth Fund, Rockefeller Foundation and the Ikea Foundation - has already invested in South Africa in the form of a training facility at Komati, the site of a shuttered coal-fired power plant, to prepare a pipeline of workers for the renewable energy industry. The group is looking for more opportunities to invest, said Nicole Iseppi, director of energy innovation, at the Bezos Earth Fund.
The Geapp program will focus on so-called secondary municipalities that have more difficulty in raising funds than the country’s six large metropolitan areas, said Cassim. He cited Rustenburg, a city of more than 600,000 people in the platinum-mining belt of the North West province, and Newcastle, a steel-producing town of about 400,000 in the south eastern province of KwaZulu-Natal, as examples.
It will bring in expertise to assist in project preparation and to advise on transactions, Iseppi said.
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