T he South African energy policy framework has often been perceived by investors as uncoordinated and lacking coherence. This has led to market uncertainties, impeding the growth of independent power producers (IPPs). While Eskom and the National Department of Energy have had some success in rolling out the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), a lengthy pause in bidding windows between 2015 and 2021 damaged investor perceptions about the local renewable energy market. Responding to the energy crisis after Stage 6 loadshedding in June, on 25 July President Cyril Ramaphosa announced a range of interventions to add capacity to the energy grid. This included expanding the REIPPPP with interventions to double the capacity of Bid Window 6 to procure renewable energy from the private sector. Municipal challenges Municipalities have previously had the capability to generate new energy or procure power from IPPs. However, policy uncertainties and challenges in securing licences from the National Energy Regulator of South Africa (NERSA) have led many to abandon their renewable energy generation efforts. Uncertainties have also constrained private power procurement. In 2021, after a court case between the City of Cape Town, National Department of Energy and NERSA, the Electricity Regulation Act was amended, raising the threshold of power generation without a licence from 1 MW to 100 MW. Following the president’s announcements on 25 July, this 100 MW limit has also been scrapped. However, securing local and international investment remains a significant challenge constraining new IPP development. International investment National Treasury calculated that globally there is US$ 12 trillion in circulation from sources such as the Green Climate Fund established by the United Nations and managed by the World Bank. Unfortunately, most of these funds are received by developed countries. Developing and emerging countries struggle to access these funds because of the perceived risk of projects or of investing in a developing country. Generally, public data describing the availability of wind or solar energy resources in developing countries are limited or not frequently published. The absence or shortage of quality trend data results in poorly calibrated financial risk models, resulting in inaccurate investment risk ratings. South Africa’s energy security crisis is crippling the country’s economic development. Recently, President Cyril Ramaphosa announced a suite of changes to add additional private generation capacity to the country’s energy grid. In partnership with the South African BRICS Think Tank, the HSRC has studied opportunities to expand renewable energy financing by comparing South Africa’s experiences with those of India and China. This article summarises the study’s findings, informing some of the interventions proposed by the president. By Krish Chetty, Tahiya Moosa, Yul Derek Davids, Thanyani Madzivhandila and Lebogang Ndaba Financing renewable energy in South Africa: Lessons from India and China South Africa has fair wind energy potential, particularly in the coastal areas of the Western and Eastern Cape, and in the Northern Cape. The country currently has 33 wind farms, 24 of which are in the Eastern Cape. Photo: Anna Jiménez Calaf, Pexels 30 | HSRC REVIEW VOL.20 | NO. 3 | SEPTEMBER 2022 30 | HSRC REVIEW VOL.20 | NO. 3 | SEPTEMBER 2022