SOUTH AFRICA: Development of Sustainable Financing Mechanisms for Demand-Side Energy Efficiency Market Transformation

PPIAF supported a study on the development of sustainable financing mechanisms for demand-side energy efficiency market transformation in South Africa. The study analyzed the energy efficiency potential of the agriculture, industry, and public sectors, and estimated the financing needs for energy efficiency improvements in each sector. The study found that a saving of 432 petajoules per annum (PJs/annum) could be achieved, representing 15 percent of the total South African energy consumption. The industry sector has the highest potential for savings, with a calculated 341 PJs/annum or 26 percent in savings. Manufacturing accounted for the largest energy saving of 301 PJs/annum, while mining accounted for 40 PJs/annum in savings. Agriculture has a savings potential of 69 PJs/annum or 40 percent, and the public sector has an estimated 22 PJs/annum savings or 23 percent relative to the sector. A total investment of R326.2 billion ($21.7 billion) is required to realize the 432 petajoules in energy savings. The Department of Mineral Resources and Energy is preparing an energy-saving program based on the PPIAF report findings to address the energy crisis in South Africa based on these findings. The study presents an opportunity for sustainable financing mechanisms and significant energy savings, ultimately promoting sustainable development in South Africa.