- South Africa has secured a R7.6bn loan from the Agence Française de Développement to support its Just Energy Transition Plan (JETP).
- The funding will focus on job creation, social equity, and ensuring a fair transition for communities reliant on coal industries.
South Africa has secured a landmark R7.6 billion loan from the Agence Française de Développement (AFD) to advance its Just Energy Transition Plan (JETP). This innovative financing arrangement, the largest of its kind on AFD’s balance sheet, is designed to support the social dimensions of South Africa’s transition to a low-emission economy, focusing on ensuring that communities dependent on carbon-intensive industries, like coal, are not left behind.
The loan builds on an earlier €300 million policy loan provided in 2022, bringing France’s total contribution to the JETP to €700 million of the €1 billion pledged at the 2021 COP26 summit in Glasgow. The financing aims to promote jobs, skills development, social support, and better governance in communities affected by the energy transition.
National Treasury’s Head of Asset and Liability Management, Mmakgoshi Lekhethe, highlighted the importance of collaboration in achieving the objectives of the just energy transition. “National Treasury will continue to work across all levels of government to integrate JET into our fiscal policies,” she said. “Coordination across government is essential to ensure equitable outcomes.”
The JETP is designed to ensure that South Africa’s transition to cleaner energy sources is inclusive and equitable, with a particular emphasis on supporting the livelihoods of those in regions reliant on coal-based industries. The plan aims to harness the potential of the transition to create new job opportunities, reduce poverty, and promote social justice.
The AFD loan is explicitly focused on addressing the social equity aspects of the transition. It targets job creation, poverty alleviation, social justice, and equitable access to electricity. In addition to financing, the AFD provides technical support and capacity building to strengthen South African institutions involved in the energy transition process.
The loan is tied to policy reforms to ensure the transition is just and fair. A robust monitoring and evaluation framework will track progress and outcomes, ensuring that the social goals of the JETP are met.
Audrey Rojkoff, AFD’s Regional Director and Country Director for South Africa, emphasized balancing South Africa’s energy needs with its climate commitments. “We are committed to ensuring that the benefits of this transition reach all segments of society, and with careful planning and implementation, we anticipate positive outcomes for communities throughout the process,” she said.
South Africa’s JETP is backed by a robust institutional and governance framework, including the Presidential Climate Commission (PCC), the dedicated JET Programme Management Unit (JET-PMU), and support from international partners like France and others. This comprehensive approach will drive meaningful change as South Africa moves toward a greener, more inclusive economy.