Apr 10, 2023
ReACT is the latest CIF study that was launched at a global event on March 30, co-hosted by the Federal Ministry of Economic Cooperation and Development (BMZ, Germany), CIF, and the Powering Past Coal Alliance (PPCA). High-level stakeholders from the private and public sectors; donor and recipient countries; multilateral development banks (MDBs), and think tanks were among the attendees, who shared experiences, initiatives, and insights on technical and financial considerations for repurposing coal assets.
The report analyzes latest technical and financial repurposing strategies of coal assets in developing regions, with case studies on three countries (i.e., South Africa, India, and Indonesia) in order to address energy security, just transition, and stranded asset concerns. ReACT is one of the initial steps of CIF’s USD 2.5 Billion Accelerating Coal Transition (ACT) investment program — the world’s first multilateral coal transition mechanism. ACT supports the development of strategies for the early retirement of coal assets in developing countries, among others, in parallel with other CIF programs. ACT is also engaged in the Just Energy Transition Partnerships (JETP) that aim at accelerating the decarbonization of South Africa’s and Indonesia’s economies.
The goal of this simplified guide (which was led by Black & Veatch) is to offer decision-makers an understanding of the existing regulatory environments and contextual challenges; develop an implementable technical framework for the selection of coal assets to be retired, and identify short- and long-term coal-repurposing financial solutions, which are viable, scalable, efficiently utilized, holistic, and considerate of the individuals and communities, whose livelihoods and socio-economic development respectively, might be adversely affected in this context.
Despite the complex challenges that co-occur with coal transitions — and for which CIF’s ACT program offers a holistic financial toolkit at scale — repurposing and transitioning play a catalytic role in achieving the Paris Agreement goals on greenhouse gas emissions; reaching net zero emissions by 2050; improving public health; increasing energy security, and enhancing resilience to climate-related disasters, among others.
Currently, nearly 733 million people live without electricity and about 2.4 billion people cook or heat their homes with harmful fuels. Reducing dependency on coal and shifting to coal alternatives, and therefore to a greener future, is imperative to tackle climate change and address energy access. The importance of this new study lies in the fact that it sets the foundation for planning a successful coal transition, encompassing technical, social, and economic parameters, and places the most vulnerable at the centre, to ensure a fair and equitable transition.
