ICLEI – Local Governments for Sustainability is a global network working with more than 2,500 local and regional governments committed to sustainable urban development.


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ICLEI – Local Governments for Sustainability is a global network working with more than 2,500 local and regional governments committed to sustainable urban development.

ICLEI Regional Secretariats and country offices

Alternative Financing Models for Embedded Generation of Renewable Energy in South African Municipalities

What we are doing

South Africa has an acute energy generation challenge and urgently requires more generation capacity on the grid and in combination with the establishment of a transmission company. Although the Development Bank of Southern Africa (DBSA) and the Green Climate Fund (GCF) have jointly developed a ~R4 billion facility; the Embedded Generation Investment Programme (EGIP) which provides concessional funding to support municipal-based solar and wind embedded generation projects, a pre-feasibility study is required as an entry point to access it. Municipalities require financial and technical support for pre-feasibility studies to access the EGIP, without which DBSA is not mandated to support this early stage of project development. This project seeks to address this resource and capacity gap by developing alternative finance models for low carbon energy and related pre-feasibility studies, while building capacity in municipalities for their implementation therefore preparing them to access the EGIP.

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How we are tracking

- Recommendations for policy/ legislation on climate change mitigation - 4 Technical and Financial Pre-feasibility Studies - 4 Project Preparation Facility Applications to the Development Bank of South Africa (DBSA) to access Embedded Generation Investment Programme (EGIP) - A Financial Tool to estimate financial feasibility for embedded generation projects in South Africa - 6 online training sessions delivered to municipalities over 10 months - Training manual on Embedded generation of renewable energy

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What we are achieving

Through the project, ICLEI Africa will work to enhance local government’s ability to take advantage of the new opportunity to enter independent power producer (IPP) agreements and access the Embedded Generation Investment Programme (EGIP). The project will develop alternative finance models and related pre-feasibility studies for low-carbon energy projects in municipalities. Through the capacity building, skills enhancement and technical assistance work delivered through this project, beneficiaries will be supported to overcome two of the most significant barriers to accessing the EGIP (and additional climate finance opportunities). These are the capacity to gather data for and the development of pre-feasibility studies for renewable energy efficiency and the capacity to engage with potential financiers and partners. The project will undertake the following activities: - Development of policy recommendations for municipal embedded renewable energy generation solutions - Pre-feasibility Studies and Financial Model for embedded renewable energy generation projects - Municipal Training programme and city-to-city learning exchange for Embedded Generation of Renewable Energy and Climate Finance - Project dissemination and communication products

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3E, Development Bank of Southern Africa, The Rebel Group,

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