The technical assistance project will strengthen existing green transformation efforts in South Africa by engaging key actors from the finance and policy communities in dialogues, as identified, on how green bonds can be used to finance climate mitigation and adaptation. These climate actions may contribute to the implementation of Nationally Determined Contributions (NDC) under the Paris Climate Agreement, whilst in parallel demonstrate co-benefits that contribute to relevant SDGs.
The Department of Environment, Forestry and Fisheries (DEFF) in South Africa, the International Climate Initiative (IKI)–Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) / UNEP Green Economy Transformation project in South Africa, and Resident Coordinator of the United Nations in South Africa
The technical assistance project is intended to strengthen the competence of key actors, design and implement innovative solutions for financing initiatives towards the attainment of South Africa’s NDCs and the SDGs. The project will support South Africa to establish green bonds at the municipal level and within select municipalities, by providing technical capacity building coupled with technical advisory and South-South exchange with Indonesia. These activities will be complemented by a communications campaign to share the outcomes and raise awareness on the need and potential for innovative financing solutions to accelerate a global shift to sustainable and inclusive economic activities.
The Republic of South Africa has distinguished itself as a pioneer in the transition to an inclusive green economy. The country is aiming at a three-tier process in the following sequence: reaching an emissions peak, followed by temporary consolidation at a constant level, and finally, the start of emissions reduction. Continued support to the social dimension of a green economy is thus necessary, more specifically within the context of a ‘just transition’ in South Africa.
In support to South Africa’s just transition towards a low-carbon, resource-efficient and climate-resilient development pathway, the South African Green Fund was established by the Department of Environment, Forestry and Fisheries (DEFF) to act as a catalyst and promote green economy initiatives. The Green Economy Transformation (GET) project supports the Government of South Africa through DEFF by focusing on capacity building for circular economy, green jobs and youth and strengthening advisory services on green economy.
The technical assistance project responds to South Africa’s request to UNEP to strengthen the social dimension of its green economy transformation by mainstreaming climate, environment and poverty alleviation into new green financial instruments such as the green bonds. Green bonds offer alternatives to revenue generation for local government with multiple additional benefits for the environment and for building partnerships with citizens in addressing local challenges. Resources raised from the green bonds can be directed towards building sustainable infrastructure, thereby enhancing citizens social and economic well-being.
To provide capacity building through training and advisory services on the process of issuing of green bonds at municipality level (two municipalities have expressed their interest and commitment) in close cooperation with DEFF and other initiatives in the country.
To develop a tailor-made handbook on green bonds with a focus on the communal level, especially from environmental and social dimensions. The handbook will form part of the training activities on enhancing capacities of targeted municipalities on developing green bonds. The Technical Assistance partners will implement communication activities focusing on disseminating the handbook within and beyond the scope of the TA to other global PEA partners.
The Government of South Africa is committed to achieving the NDCs targets of reduced carbon intensity as indicated in specific milestones and timelines. Cooperation with Poverty-Environment Action on the green bonds technical assistance will strengthen the competencies of key actors in public institutions to identify and implement innovative strategies for financing initiatives within the selected municipal jurisdictions. It will contribute positively towards the achievement of NDCs and SDGs, once implemented. The partnership broadly contributes to PEA’s output on accelerating SDG implementation process to leverage scale up through use of integrated poverty-environment mainstreaming approaches. This is being done by raising awareness on alternative sources of public financing that contribute to environmental, economic and social aspects of the SDGs and NDCs. Furthermore, the partnership will continue broadening the dissemination and use of the experiences gained from the capacity building activities and the development of the handbook through proactive engagement with key global and regional actors, working in the area of sustainable green financing, to realize achievement of SDGs.
During the hosting of the 3rd Partnership for Action on Green Economy (PAGE) Ministerial Conference which was held in Cape Town, in 2019, Governments showed recognition of the importance of sustainable finance to achieve financial stability and meeting the goals of the 2030 Agenda and the Paris Agreement. Large-scale private sector financing is critical in developing countries to transition to low-carbon and climate-resilient economies. Sharing experiences between developing countries on just transitions is an important element that will contribute to scaling up the best practices and extract the lessons learned that will inform future policy making.
The umbrella project has been designed to maximize on the potential for long-term sustainability and strengthening capacities of key actors in public institutions to implement SDGs and NDCs in a more coherent way, using green economy approaches. The project will benefit from established cooperation and relationships with major international Green Economy networks including the Green Fiscal Policy Network - established in 2014, and the Green Growth Knowledge Platform partnership. The project will also work within the framework of Partners for Inclusive Green Economy and cooperate with stakeholders such as the Organisation for Economic Co-operation and Development (OECD), the Global Green Growth Institute (GGGI) and the Green Economy Coalition (GEC). These networks will play a critical role in the short term in the dissemination of practical examples and lessons learned. The experience in South Africa will contribute to the growing wealth of knowledge and experiences on green financing across the globe and to existing PEA’s rich knowledge of mainstreaming tools that contributes to achievement of SDGs.