The European nations of France and Germany have signed loan agreements extending concessional financing of €300 million each – about R10 billion total – to South Africa for its just energy transition. The National Treasury will receive loans directly from the Agence Française de Développement (AFD) and Kreditanstalt für Wiederaufbau (KFW), two public development banks.
“These loans are highly concessional as their terms are considerably more generous than those that can be raised on capital markets by South Africa’s government,” Treasury said in a statement. French, German, the UK, the US and the EU pledged $8.5 billion (R147 billion) to SA at COP26 in November last year as part of the Just Energy Transition Partnership (JETP).
The UK, US, and EU are expected to offer 97% of the R147 billion in loans, but the terms are still unknown. It is, however, only a drop in the ocean of what experts estimate South Africa will need to achieve its transition goals. As part of his speech at the COP27 conference in Egypt this week, Cyril Ramaphosa said that the country needs close to R1.5 trillion ($86.5 billion) to achieve its energy transition objectives.