What we did
Local governments in South Africa are looking to develop embedded generation projects to achieve city-level goals. These projects can assist in reaching climate change targets, provide cheap electricity, reduce load shedding and possibly stimulate local job creation – all desperately needed within the country. Recent policy and regulatory changes now allow certain municipalities to install embedded generation projects. However, accessing finance for these initiatives remains a challenge. Traditionally, infrastructure projects are funded by grants or off a municipality’s balance sheet. These financing methods do not fully utilise the power project financing and do not align with the project revenue flows of renewable energy projects, making them non-ideal for uptake of embedded generation. To stimulate growth of embedded generation initiatives in the country, the Development Bank of Southern Africa (DBSA), in partnership with the Green Climate Fund (GCF), has set up an R4 billion Embedded Generation Investment Programme (EGIP). Yet, small and intermediary municipalities struggle to participate in the investment programme, due to lack of capacity and resources to meet the application requirements. Many municipal projects get stuck at the step of early-stage project preparation and pre-feasibility analysis, as subnational governments are often not equipped to undertake the prefeasibility activities on their own. Knowledge brokers and financial support are decisive for municipalities to overcome the tasks needed for project development progress.
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