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US Says Debt Guarantees May Be Part of South Africa Climate Pact

  • Plans to erect new coal-fired power plants raises concern
  • Nation to decommission quarter of coal generation in a decade
The Eskom Kusile coal-fired power station in Delmas, Mpumalanga province, South Africa.

The Eskom Kusile coal-fired power station in Delmas, Mpumalanga province, South Africa.

Photographer: Waldo Swiegers/Bloomberg

Debt guarantees along with loans with interest charges that are lower than what power utility Eskom Holdings SOC Ltd. currently pays may form part of a $8.5 billion climate finance deal offered to South Africa, a senior US Treasury official said. 

The package will comprise a variety of financial instruments, and partner countries are confident additional nations, philanthropies and the private sector will pledge more financing, said the official, who asked not to be identified in line with US government policy. South Africa is in talks with the US, UK, Germany, France and the European Union to secure the funds to help transition away from coal, which is currently used to generate more than 80% of its power.