Making renewable energy affordable: the South African Renewables Initiative

The South African Renewables Initiative (SARi) aims to establish financing arrangements to enable a critical mass of renewable energy in South Africa, targeting 19 GW by 2030. The primary challenge is the higher financial cost of renewables compared to coal, which has historically been subsidized. To address this, SARi proposes a mix of concessional loans, risk insurance, and guarantees to leverage private investment. The initiative also emphasizes an industrial strategy to create local jobs and reduce the carbon intensity of exports.

• The South African Government launched the South Africa Renewables Initiative (SARi) and the SARi International Partnership to create financing arrangements that allow for a "critical mass of renewable energy sources in South Africa" without creating "unacceptable cost burdens".
• South Africa's Integrated Resource Plan (IRP 2010) targets 19 GW of renewable electricity by 2030, which would represent nearly 9% of total electricity demand and abate 138 megatonnes of CO2 between 2012 and 2025.
• The central financial challenge is the "incremental cost" of renewables compared to coal-fired plants. While the first 3.6 GW of procurement is funded by the South African public purse ("fiscus"), this model is deemed not viable for the full 19 GW rollout.
• Achieving the IRP goal requires an estimated $35.6 billion investment 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.
• To lower the cost of capital, SARi analysis suggests a "one-stop-shop mechanism" providing a combination of concessional loans, political risk insurance, currency hedges, and loan guarantees.
• 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.
• South Africa faces economic risks from carbon-sensitive international markets, with $11.2 billion in annual exports potentially subject to trade measures due to the country's high carbon-intensive GDP.

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} }