November 11, 2022: My Reflections on South Africa and COP27 in Sharm El-Sheikh

I have just returned from a very busy few days in South Africa and Sharm El-Sheikh, Egypt. It was great to see firsthand our first coal-fired power plant decommissioning and repurposing project, and to represent the World Bank Group at COP27.

SOUTH AFRICA

In South Africa, I visited Komati , the site of a recently decommissioned coal-fired power plant. Just prior to my trip, the World Bank Group's Board approved a financing package of $497 million toward decommissioning and repurposing the plant with renewable energy and battery storage, with a significant component for the just transition of workers and communities.

Komati serves as a demonstration project to help South Africa and other countries move toward lower emission growth models and reflects the importance of supporting countries with concessional financing to promote investment in global public goods. While in Komati, I was joined by the Minister of Public Enterprises, the Premier of Mpumalanga Province, and both the Chairman and CEO of Eskom to discuss the energy transition path and the importance of inclusive process and creating opportunities for affected workers and communities.?

While in Pretoria, I was pleased to meet with Minister of Finance Enoch Godongwana on broader economic reforms to strengthen growth and job creation through improved fiscal management, better infrastructure, and business enabling environment. I also had meetings with the Presidential Climate Commission and heads of international missions from the European Union, US, UK, France, and Germany.

During my time in South Africa, I was interviewed by CNBC Africa and spoke about the crisis facing development, challenges of energy transition in South Africa and globally, the World Bank Group initiatives for COP27, as well as the challenge of rising debt.

COP27

At COP27 in Sharm el-Sheikh, I hosted several events in our pavilion with leaders and also joined panels hosted by others. I presented our new umbrella trust fund SCALE - Scaling Climate Action by Lowering Emissions . SCALE is the ‘missing piece of the puzzle’, a key non-fragmented avenue for climate action, which I also emphasized in my interview with Bloomberg News . It will pool funding from the global community, provide grant payments on a results basis to client countries for verified emissions reductions, and help countries unlock private sector funding through international carbon markets.

I also launched the Fast Mitigation Sprint at our methane conference, where I was joined by representatives from the United States, China, EBRD and EIB. There was solid consensus around the room on the need for the sprint, and encouragement for this urgent WBG climate action priority. In particular, the engaging dialogue between the US and China was a good reflection of the convening power of the Bank.

At a breakfast hosted by Chancellor Olaf Scholz of Germany, I announced that we are establishing the Global Shield Financing Facility to support the Global Shield initiative of the G7 and V20 that will help vulnerable countries improve their financial protection against disasters.

I was glad to participate in the launch of the Egypt CCDR alongside Prime Minister Mostafa Madbouly and Minister Rania Al Mashat of Egypt , showing our commitment to helping the country integrate climate and development.

In my remarks at several events, I emphasized climate as a defining challenge for development, advocated for more resources for climate and development needs, and confirmed our commitment to evolving for more action and impact. I highlighted that for growth and development, the world needs more aluminum, iron and steel, cement, and fertilizer, and that their production needs to become less carbon intensive.

I also noted that climate action has to be a global effort, with common but differentiated responsibilities. High-income countries will need to lead the way by reducing their own emissions, reducing exports of high carbon intensity fuels, and increase their funding for climate action. In turn, major current and future emitters in the developing world will need to find low-carbon pathways to grow and provide reliable, affordable electricity to their people – with a crucial role for regional interconnections.

The world will also need to find better financing pathways for adaptation, including contributions from donors, foundations and the private sector – the significant impact of climate change on developing countries was evident in each of my bilateral meetings with our clients.

On the sidelines of COP27, I was also glad to hold productive conversations with several leaders including President?Samia Suluhu Hassan of Tanzania , ?President Emomali Rahmon of Tajikistan , and President?Ranil Wickremesinghe ?of Sri Lanka.

Looking Ahead

As I prepare to attend the upcoming G20 Summit in Bali, Indonesia, I remain concerned that developing countries are facing an economic crisis, heavy debt burdens that must be reduced, high inflation, and climate change.

Together, these critical issues represent a crisis facing development itself, and I will use my participation to advocate for action on all of these issues impacting developing countries.

-David