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February 24, 2020

Civil society calls on Minister of Finance, Tito Mboweni, to cut off financing of fossil fuels

24th February 2020

Pretoria, South Africa – Today a coalition of environmental groups handed over a list of demands to the Minister of Finance, Tito Mboweni ahead of his 2020 budget speech on Wednesday. The demands to the Minister are that the climate crisis be prioritized in his budget speech and that public finance be used to drive a just transition to socially-owned renewable energy. The group singled out the Development Bank of South Africa (DBSA) and Industrial Development Corporation (IDC), demanding that they commit to not funding fossil fuels and that they scale-up climate-smart investments in the energy sector. 

Speaking after the hand-over of their demands, Ahmed Mokgopo, campaigner at 350Africa.org, said, “As the Minister of Finance, Tito Mboweni has a leading role to play in tackling the climate crisis in South Africa, by steering public finance institutions, such as the DBSA and IDC to put in place policies that exclude funding of fossil fuels and instead finance a just transition away from coal, oil and gas. These public financial institutions have a role to play in the fight against climate change by shifting investments to renewable energy. Bold steps like this would reflect public statements by President Cyril Ramaphosa and the Minister of Environment Forestry and Fisheries, Barbara Creecy on the need to urgently take action on climate change.”

South Africa’s emissions reduction targets are woefully inadequate and any additional investment in coal power will mean that the country will not be able to meet the 1.5°C temperature goal of the Paris Climate Agreement which South Africa signed up to. Actions by public finance institutions such as the IDC which approved a R245 million loan to an Australian mining company last year, to develop a large opencast coal mine in the Limpopo Valley, will supercharge the current climate crisis.

The climate crisis continues to directly affect the South African population with episodes of flooding, droughts and food insecurity becoming more frequent. Despite the rising costs of the climate disaster and the pressures it has on both the economy and financial systems, South Africa’s public finance institutions continue to invest in fossil fuels at a rate that implies that the country will not be able to meet emissions reduction targets by 2030. Science has already shown that fossil fuels are the dominant cause of the climate crisis and therefore every fossil fuel development must be stopped and no new project put in place. 

Private commercial banks have begun to increase their focus on the risks that climate change has on their operations, but South African public finance institutions like the DBSA and IDC have failed to publicly account for how they are responding to the climate crisis. As institutions with mandates to finance sustainable development to serve the public interest, they need to provide transparency around the impacts of their investments and should lead by committing to excluding coal, oil and gas from their financing activities. 

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Contact: 

Ahmed Mokgopo, Campaigner, 350Africa.org
ahmed@350.org
+27 79 916 8918

Glen Tyler-Davies, South African Team Leader, 350Africa.org

glen@350.org

+27 71 645 7946 

Robert Magori, Africa Communications Manager, 350Africa.org

robert.magori@350.org

+254 721 525344

More information:

Download photos of the handover of demands to the Ministry of Finance here

South Africa’s commitments under the Paris Agreement

Contacts

Robert Magori 
Africa Communications Manager
robert.magori@350.org
Kenya

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