VZCZCXRO2368
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSA #0600 0861455
ZNR UUUUU ZZH
R 271455Z MAR 09
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 7864
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0963
RUEHBY/AMEMBASSY CANBERRA 0828
RUEHLO/AMEMBASSY LONDON 1725
RUEHMO/AMEMBASSY MOSCOW 0977
RUEHNE/AMEMBASSY NEW DELHI 0561
RUEHOT/AMEMBASSY OTTAWA 0786
RUEHFR/AMEMBASSY PARIS 1560
RUCPDC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS PRETORIA 000600 
 
SENSITIVE 
SIPDIS 
 
STATE PLEASE PASS USAID 
STATE PLEASE PASS USGS 
DEPT FOR AF/S, EEB/ESC AND CBA 
DOE FOR SPERL, PERSON, SCOTT, AND BIENAWSKI 
DOC FOR ITA/DIEMOND 
 
E.O. 12958: N/A 
TAGS: ENRG EFIN EPET EMIN EINV SENV KGHG SF
SUBJECT: SOUTH AFRICA'S GREEN INVESTMENTS IN STIMULUS 
PACKAGE 
 
REF: STATE 25022 
 
SBU Not for internet distribution. 
 
¶1.  (sbu) SUMMARY: This cable responds to reftel request for 
information on South African green investments in economic 
stimulus packages in preparation for the G-20 meeting.  South 
Africa relies on coal for over 90 percent of its power 
generation.  It aspires to commit to carbon emission 
reductions, but postponement of state power utility Eskom's 
tender for new nuclear build has committed the country to 
greater use of mega coal-fired power plants in the 
medium-term.  Coal-to-liquids petrochemical company Sasol is 
the world's greatest point source of carbon emissions. 
Progress is slow on renewable energy and energy efficiency 
measures.  End Summary. 
 
¶2.  (sbu) The South African Department of Minerals and Energy 
recently organized a Renewable Energy Summit (Septel) to 
assess progress at five years in implementation of a South 
African government 2004 "white paper" on renewable energy. 
South Africa has made little progress, even against a minimal 
target established, but the government is aiming to create 
incentives for investment in renewable energy, including 
special feed-in tariffs.  South Africa is promoting energy 
efficiency and demand-side management measures, such as solar 
water heaters and more efficient lighting, to conserve power 
in light of supply shortages experienced since the January 
2008 power crisis.  Again, progress is slow.  South Africa 
has rehabilitated some older non-green power stations to 
increase power supply and the global slow-down and a related 
closure of domestic smelters has reduced demand.  The result 
has been an increase in the reserve margin from four to eight 
percent since January 2008. 
 
¶3.  (sbu) The South African National Economic, Development, 
and Labor Council (NEDLAC) put forth a "Framework for South 
Africa's Response to the International Economic Crisis" on 
February 19, 2009.  A short "green" section states: "The 
parties recognize the opportunities in industries that combat 
the negative effects of climate change and believe that South 
Africa should develop strong capacity in these green 
technologies and industries.  Accordingly, it is agreed to 
develop incentives for investment in a program to create 
large numbers of 'green jobs', namely employment in 
industries and facilities that are designed to mitigate the 
effects of climate change.  Government will be asked to 
develop a proposal for consideration by the parties.  This 
proposal will, where appropriate, build on current 
initiatives of greening existing manufacturing and service 
activities." 
 
¶4.  (sbu) Finance Minister Trevor Manuel proposed incentives 
for investments in energy-efficient equipment during his 
February 11, 2009 budget speech.  Manuel said these 
incentives could include supplementary depreciation 
allowances.  Manuel encouraged South African companies to 
take advantage of the Kyoto Protocols Clean Development 
Mechanism (CDM), and said the National Treasury would 
introduce a favorable tax treatment for income from the sale 
of emission reductions through the CDM.  The Minister also 
Qof emission reductions through the CDM.  The Minister also 
noted that the tax on plastic shopping bags would be 
increased from three to four Rand cents. 
LA LIME