Page 10 - AfrElec Week 45 2022
P. 10
AfrElec INVESTMENT AfrElec
South Africa signs €600mn loan
deal with France, Germany to
support just energy transition
SOUTH AFRICA FRANCE and Germany have signed loan agree- According to Audrey Rojkoff, AFD regional
ments with South Africa to each extend €300mn director for Southern Africa and country direc-
($301.5mn) in concessional financing to support tor for South Africa, this first public policy loan
the country’s efforts to reduce its reliance on to South Africa aims at promoting policy dia-
coal through a just energy transition to cleaner logue between the countries. The AFD loan will
energy sources. be accompanied by grant financings from France
The loans are provided by the French and to support further policy developments related
German public development banks, AFD and to the JET.
KfW, directly to the South African govern- Rojkoff says that along with dialogue and
ment via its National Treasury, Mining Weekly knowledge-sharing with other countries, contin-
reported on November 9. ued research will also be essential to fully under-
The financing agreements were announced at stand potential climate risks and their impact on
a ceremony held at the ongoing United Nations South Africa’s financial system.
Climate Change Conference (COP27) in Egypt. “We expressly welcome South Africa’s com-
The signing represents a significant milestone mitment to reducing electricity generation from
in the implementation of the Just Energy Tran- environmentally harmful coal,” said Silke Stadt-
sition Partnership (JETP) formed at COP26 in mann, KfW Development Bank’s country direc-
November 2021. tor for South Africa.
The JETP is a long-term partnership between “As a long-term partner of South Africa, we
South Africa, France, Germany, the United support these efforts not only with concessional
Kingdom, the United States, and the European loans for necessary investments and grants for
Union. The group aspires to support South a Just Energy Transition, but also with compre-
Africa in accelerating its journey to a low-carbon hensive studies on energy sector reform,” she
economy and climate-resilient society, writes added.
Mining Weekly. Ismail Momoniat, acting director-general of
South Africa continues to rely on coal to South Africa’s National Treasury, said the gov-
produce most of its electricity and the coal sec- ernment welcomes the funding from AFD and
tor remains significant to the country’s national KfW, which forms part of support for South
economy. However, Ramaphosa has recently Africa’s JET. These loans are concessional and
announced the country’s Just Energy Transition contribute to government’s efforts to mitigate
Investment Plan 2023-2027 to kick-start the rising government debt costs.
decarbonisation of its coal-dependent economy. While it is recognised that more investments
Last year, the founding partners of the JETP are needed, given the scale of the required transi-
pledged to mobilise an initial amount of $8.5bn tion in the context of the current socio-economic
over the next three to five years to advance the challenges, the loans will provide much-needed
partnership. catalytic funding for the implementation of the
“One year ago, French President Macron JET investment plan.
pledged that France was ready to commit sig- South Africa estimates it lacks financing for
nificant support for South Africa’s ambitious $39bn (ZAR 700bn), or about 44% of its invest-
decarbonisation project for a just energy tran- ment needs for the transition, and is working to
sition. We are now putting those words into mobilise more funding from other country part-
actions with this important loan,” said Arnaud ners, the private sector and non-profit organisa-
Roux, Chargé d’affaires of the French Embassy, tions, bne Intellinews reports.
as quoted by Mining Weekly.
P10 www. NEWSBASE .com Week 45 09•November•2022
