Japan offers energy loan, ammonia technology to South Africa
Japan plans to fast-track talks with South Africa on a yen-denominated energy loan, while promoting its technology to blend ammonia with coal to reduce carbon emissions in a country that still generates most of its electricity from one of the dirtiest fossil fuels.
The loan would be used by South Africa to extend its own energy transition aims, Japanese diplomatic officials said, asking not to be identified in line with government practice, during a visit by its Foreign Minister Toshimitsu Motegi. The size of the loan was not specified.
Japan’s offer of energy transition assistance for South Africa adds to about $10-billion in climate finance pledged to the continent’s biggest economy by European nations in a formal pact. Countries such as Germany and Japan are seeking to boost the presence of their companies in the nation, which has some of the world’s best solar power and green hydrogen production potential.
The loan was first mooted in a meeting between South African President Cyril Ramaphosa and former Japanese leader Shigeru Ishiba in a meeting in Yokohama in August at an Africa-focused summit.
Japan has been promoting a technology known as ammonia co-firing, where a portion of the coal used at power plants is replaced with the hydrogen derivative to curb emissions of climate-warming gases.
South Africa’s abundant sun and wind should, in theory, allow it to use renewable energy to split water to produce so-called green hydrogen. The clean-burning fuel is then combined with nitrogen to produce ammonia, which is easier to transport.
Still, the technology has attracted criticism for potentially prolonging the life of coal-fired plants. South Africa produces about three-quarters of its electricity from coal.
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