Replacing South Africa’s aging and inadequate electricity generation capacity with renewable energy plants is an opportunity to spur economic growth and cut emissions, the effective head of a presidential climate change commission said.

While many countries face the problem of having to idle fossil fuel-fired power stations to meet climate commitments, many of South Africa’s decades-old, coal-fired plants are due to close anyway, said Valli Moosa, deputy chairman of the Presidential Climate Change Coordinating Commission.

“We are an energy-short country. That’s our opportunity and that hole is only going to be filled by renewables,” he said in an interview at his Johannesburg home on May 28. “There is no shortage of appetite on the part of capital to invest in renewable energy in South Africa.”

Eskom Holdings SOC Ltd, South Africa’s state-owned power company and a near monopoly, has subjected the country to intermittent outages for more than a decade, partly because of poor maintenance at its fleet of 15 coal-fired stations.

Attempts to have private companies build new coal-fired stations in the country have faltered because of the reluctance of banks to finance them.

Shifting to renewables provides Africa’s most industrialized country with a chance to change its economic fortunes, said Moosa, who served as South Africa’s environment minister between 1999 and 2004. The country is the world’s 12th biggest source of the climate-warming gases.

Growth Spurt

The transition is “what’s going to give us the next big spurt of economic growth,” he said. “The commission is starting to look at how we can move the South African economy where it is to a low-emissions economy, because we have to. If we don’t we are not going to get the money to develop any other kind of economy, or businesses are going to become uncompetitive.”

Moosa was appointed to the 22-member commission in December and effectively runs it, as its chairman is president Cyril Ramaphosa.

The main purpose of the body “is to develop a national consensus on how the South African economy moves from where it is currently to a zero emissions economy by 2050,” said Moosa.

The first big issue the climate commission, which has had two meetings so far, will address is South Africa’s energy challenge, said Moosa. The commission has members from major polluters, Eskom and Sasol Ltd, as well as labor unions, non-governmental organizations and the cabinet.

“It’s going to have to build consensus on how we reduce the carbon footprint of our energy industry and at the same time grow the energy supply and make it more dependable,” he said.

As a first step in reducing the country’s emissions, the commission will meet on June 4 to make a recommendation on whether it supports the environment ministry’s proposed greenhouse gas reduction targets, known as nationally determined contributions, for 2025 and 2030.

The proposal, to be submitted ahead of the United Nations Climate Change Conference to be held in the UK in November, estimates that to implement its targets the country will need to access $4.5 billion per year from multilateral and bilateral sources by 2025, and $8 billion a year by 2030.

A draft proposal released in March that improved on previous greenhouse-gas emission targets has been criticized by several environmental organizations for not being ambitious enough. Under the new targets, maximum emissions will not exceed 510 million tons of carbon dioxide equivalent units in 2025 and 440 million tons of carbon dioxide equivalent units in 2030.

“There is scope for us to do much more to bring in capital, including concessionary type capital for this,” said Moosa, who helped establish two Johannesburg-based private equity funds and Lereko Investments Ltd.

“There is capital that’s looking for these projects in countries like South Africa, and remember that we are a developing country, we are in Africa, we are disadvantaged etcetera, etcetera.”