Making renewable energy affordable: the South African Renewables Initiative

This policy brief describes the South African Renewables Initiative (SARi), a government-led effort launched in December 2011 to establish financing arrangements for scaling up renewable energy. The initiative aims to achieve a target of 19 GW of renewable electricity by 2030 while managing the incremental costs compared to coal-fired power to avoid unacceptable economic burdens on the public.

• The South African Government launched the South Africa Renewables Initiative (SARi) and the SARi International Partnership on 7 December 2011 in Durban. The primary objective is to create financing arrangements that allow for a "critical mass of renewables to be developed, without incurring unacceptable cost burdens on South Africa".
• South Africa's Integrated Resource Plan (IRP 2010) targets 19 GW of renewable electricity by 2030, which would represent nearly 9% of the country's total electricity demand. This target is expected to abate 138 megatonnes (Mt) of CO2 between 2012 and 2025, contributing 7% of the emissions cuts required for the country's 2025 Cancun Agreement commitment.
• The core financial challenge is the higher cost of renewables compared to coal-fired plants. While the first 3.6 GW of renewable procurement is funded by the South African public purse ("fiscus"), this model is considered non-viable for the full 19 GW rollout. To address this, SARi seeks a mix of concessional loans, political risk insurance, currency hedges, and loan guarantees to lower the cost of capital.
• Achieving the IRP's renewable goals requires an estimated total investment of $35.6 billion by 2030. This would involve approximately $11.3 billion in low-cost loans and risk mitigation products to leverage $24.3 billion in commercial finance.
• The first major renewables tender process for independent power producers (IPPs) selected 1,416 MW of projects, consisting of approximately 632 MW of solar photovoltaics (PV), 150 MW of concentrating solar power (CSP), and 634 MW of wind power. A subsequent round in 2012 aimed to add 2,209 MW to complete the first procurement window of 3,625 MW.
• The transition to renewables is expected to create an average of 20,000–23,000 jobs per year between 2012 and 2030, primarily in construction, manufacturing, and installation. Additionally, the program aims to mitigate the risk to $11.2 billion in annual exports that are vulnerable to carbon-sensitive international markets.
• A more ambitious 'bold' scenario was modelled, targeting 24 GW by 2025. This scenario would create an average of 36,000 jobs per year (2012–2024), reduce emissions from energy-intensive exports by 30%, and contribute 12% of the 2025 international climate mitigation commitment, though it would require $12–14 billion in additional funding.

APA

Ward, M. (2012). Making renewable energy affordable: the South African Renewables Initiative. Climate and Development Knowledge Network. http://cdkn.org/wp-content/uploads/2012/06/SARi-InsideStory_6pp_proof5.pdf

Chicago

Ward, Murray. Making renewable energy affordable: the South African Renewables Initiative. Climate and Development Knowledge Network, 2012. http://cdkn.org/wp-content/uploads/2012/06/SARi-InsideStory_6pp_proof5.pdf.

Wikipedia

{{cite report |last1=Ward |first1=Murray |title=Making renewable energy affordable: the South African Renewables Initiative |publisher=Climate and Development Knowledge Network |date=June 2012 |url=http://cdkn.org/wp-content/uploads/2012/06/SARi-InsideStory_6pp_proof5.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ward2012making, author = {Ward, Murray}, title = {{Making renewable energy affordable: the South African Renewables Initiative}}, institution = {Climate and Development Knowledge Network}, year = {2012}, month = jun, url = {http://cdkn.org/wp-content/uploads/2012/06/SARi-InsideStory_6pp_proof5.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }