Enoch Godongwana, the head of the ANC’s sub-committee on economic transformation has been appointed board chairperson of the DBSA. This is an appointment that 350Africa.org is cautious about given the Mr Godongwana utterances on forcing South African banks to invest in new coal coal-fired power stations – a position that 350Africa.org condemns in the strongest terms.  

Through the #ThumaMina DBSA campaign, 350Africa.org in support of our partners and grassroots communities has been calling on the DBSA to publicly commit to not finance

Thabametsi, a new coal-fired power plant proposed under the South African government’s Coal Independent Power Producer Programme (CIPPP). Development of the proposed power plants under this programme has been massively delayed as a result of sustained resistance against Thabametsi and Khanyisa (another coal power plant proposed under the CIPPP). The programme has suffered significant blows as challenges from the affected community, civil society via the courts, and even major banks like Nedbank committing to not invest in any new coal-fired power, have derailed plans for Thabametsi and Khanyisa. 

The DBSA is also currently not committed to financing Thabametsi, however, no public commitment to shun any new proposal to finance the coal power station has been made.

While no clear plan has been put forward with regards to forcing banks to invest in coal through prescribed assets – a policy that would legally force investors/asset managers to invest in specific assets due to government regulation – this type of rhetoric does not reframe South Africa’s economic narrative towards a just transition away from fossil fuels. This is a move needed for the country to avoid the mounting impacts of climate change and for South Africa to contribute its fair share of limiting global temperature rise to 1.5C as per the Special Report on 1.5C issued by the Intergovernmental Panel on Climate Change (IPCC) in October 2018. 

South Africa’s resources should be used for economic and social gains that benefit the most vulnerable in our society. South Africa needs a solid plan towards a fair, fast and just transition away from coal. The DBSA, as a public finance institution could be a major catalyst for a shift towards 100%  renewable energy, leaving no one behind. Mr Godongwana’s public references of the ANC’s probe into forcing banks to invest in coal is a threat to frontline communities and all South Africans. It is our hope that the bank’s management will not be swayed from their support of a just transition by board level positions that could potentially jeopardize the bank’s work on clean energy investments. While the bank’s approach to climate action could be bolder, rash comments supporting forced investments in a dirty, dying industry are not financially prudent and may tarnish the DBSA’s reputation. They are certainly not in the interests of achieving the country’s broader development goals, especially in a climate constrained world.