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South Africa: DME and DBSA to implement World Bank renewable energy market transformation programme

The Department of Minerals and Energy (DME), together with the Development Bank of Southern Africa (DBSA), has established a renewable energy market transformation programme (REMT) to assist investors in overcoming some of the obstacles and barriers preventing growth in the renewable energy sector.
Some $8,3-million in funding has been made available for the programme, and this came from government ($2,3-million), and global financial institutions, namely the World Bank, through its global environment facility ($6-million).

However, the project was worth some $17,3-million, as about $9-million of already installed capacity from the private sector was contributed.

The project’s objectives were to “remove the barriers and reduce the implementation costs of renewable energy technologies, and also to promote on-grid electricity for renewable energy sources”, explained REMT project coordinator Moses Chundu.

The fund would assist the DME in reaching its target of 10 000 GWh of electricity to be generated from renewable sources by 2013.

To reach that target, significant work needed to be done, and a clear policy needed to be defined to ensure the private sector had enough incentives to push the industry forward.

The REMT would not actually finance investments, but would rather assist with feasibility studies, for example.

The aim was to help in overcoming the problem of penetrating the market and creating a sustainable market for renewable energy technologies, as getting these technologies commercialised has been a challenge.

“The thrust is to get the renewable energy onto the grid, and thus, the issues of policy, the right tariffs etc. come into the picture,” said Chundu.

“We aim, by 2013, to establish a policy and regulatory framework, and provide technical assistance, and also help with institutional capacity building for the various key players involved in the process,” he added.

The programme has two specific focus areas, firstly the promotion of renewable energy generation to be incorporated into the grid, and secondly, a strong commercial solar water heating push, as solar water heating has up until now, been largely focused on the domestic market.

The project was a number of years in the making, but was officially launched in November. The DME was responsible for implementing the project, and the DBSA was the designated implementing agent.

Additional information: Background on the World Bank project
News date: 07/11/2008

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