PACE is finding its feet in South Africa

GreenCape, working with the City of Cape Town, used SUNREF’s technical assistance facility to finance a legal review of the Property Assessed Clean Energy (PACE) model in South Africa. PACE  enables low-cost, long-term funding for climate change, mitigation, energy efficiency, renewable energy and water conservation projects. Local governments across the world use PACE programmes to help property owners finance renewable energy and energy efficiency improvements on residential and commercial properties. In the USA 36 states have active PACE programmes  and have had significant success in promoting investments in renewable energy and energy efficiency.

The outcome of the review, aiming at ensuring its legality and applicability in the local context, was positive. The review, compiled by Webber Wentzel Attorneys, also included a pathway to guide a successful PACE program in South Africa.

The PACE concept was initially introduced to South Africa  during a workshop hosted by the University of Cape Town’s Bertha Institute in 2016. The workshop focused on innovative green finance mechanisms relevant for South Africa and the PACE scheme has been used extensively in the United States.

Due to the international success of PACE programs and considerable local interest, a small working group was established to flesh out key implementation questions for the City of Cape Town. One of these questions concerned the legal mechanisms available in the South African context.

A PACE initiative in Cape Town would help promote household and commercial investments in technologies such as solar rooftop PV and energy efficient lighting. This in turn will support the City’s climate mitigation and energy security objectives. In addition it will help build businesses that provide services to ensure these installations work optimally into the future.

SUNREF supported the local research into the necessary legal mechanisms needed to implement this innovative program. To encourage the acceleration of green finance in South Africa, SUNREF provides financial instruments and customized technical support to such initiatives through its partner SANEDI that hosts the technical assistance facility.

This legal review, which was supported by SANEDI, has allowed the City of Cape Town to plan to include a PACE mechanism in its energy resilience planning. SUNREF and SANEDI will be monitoring the progress of this innovative contractual scheme and will support improving the awareness and understanding of it at a political level to support its possible implementation elsewhere in the country. Helping stimulate this type of dialogue on effective policy and implementation is a key objective of the SUNREF programme.

SUNREF South Africa Phase II is a partnership between the AFD, the Industrial Development Corporation (IDC) and the South African National Energy Development Institute (SANEDI). The programme has been underpinned by financial support from the Swiss Economic and Development Co-operation Organisation SECO.

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