- The French Development Agency (AFD) and the German Development Agency (KfW) are providing €600 million in loans for the energy transition in South Africa.
- The funding is part of an €8.3 billion package pledged at COP26 in Scotland in 2021.
South Africa currently benefits from the Just Energy Transition Partnership (JETP), especially with France and Germany supporting South Africa with €600 million for the energy transition.
The agreement was signed on the sidelines of COP27. The JETP was launched at COP26 in Glasgow, Scotland, in 2021.
The funding is being provided by the French Development Agency (AFD) and Kreditanstalt für Wiederaufbau (KfW), the German development agency. “This first public policy loan from France to South Africa is accompanied by €1.5 million in grant support, which will help finance local research on the social impacts of the transition, possible options for converting coal-fired power plants, the potential for job creation and the opportunities for mobilising climate finance,” AFD said.
South Africa and the development partners have agreed to raise €8.3 billion to support the country’s energy transition. The money given to the South African treasury is the first instalment of the money that will be handed over the following few years, according to AFD.
With an installed capacity of 48 380 MW, coal currently accounts for 80% of South Africa’s energy output. The state-owned firm Eskom, also in charge of the transmission and distribution of electricity in South Africa, owns these thermal power plants. However, renewable energy generated via the Renewable Energy Independent Power Producer Procurement Programme (REIPPP), intended to encourage private sector participation, has recently increased the grid’s power.