IDC to spend R11.7bn on green future
The Industrial Developnent Corporation (IDC) plans to invest nearly R12 billion in "green industries" according to chief executive Geoffrey Qhena. The aim is to create jobs while reducing carbon emissions and is part of the IDC's target of injecting R70bn into the South African economy between 2009 and 2015.
"Even though nothing came of the Copenhagen climate change talks (in December), it was agreed something had to be done to address climate change issues," Qhena said. He said the IDC would fund alternative energy sources like wind and solar power and improve energy and resource management.
To date the lender had approved R33m to study the feasibility of establishing up to 450 megawatts of solar generating capacity in the Northern Cape.
Local economists said that the plan was tiny by global standards and thus had to catalyse private funds in strategic sectors.
South African spending is much less less than green investment in Asia, which has become the world leader in green innovation thanks to huge investments by China and South Korea. China's green investment of $216bn amounts to nearly half the spend of the Group of 20 nations and comprises 3 percent of China's gross domestic profit (GDP).
South Africa's spending amounts to 0.2 percent of its GDP.
"The number is a substantial jump from anything we've seen in the past," said Peet du Plooy the sustainable development manager at Trade and Industrial Policy Strategies.
Du Plooy continued: "We need to get out of the mindset that the government puts money in. There isn't money to do much more capital expansion. But yes, we are behind, so the stimulus has to be strategic"
Iraj Abedian, chief economist at Pan-African Capital, said the money available for green spending was by itself not sufficient to set South Africa on a low carbon trajectory.
"Greening can be encouraged by the state, but it can't be done by the state. That's a big distinction for me," said Abedian. "It's a catalytic role in nudging the private sector to become green. That's more important than how much money you put in."
The IDC, refocused under Economic Development Minister Ebrahim Patel, who wants to create 300 000 new jobs in renewable energy, had a "very critical role" to play said Abedian.
