- The World Bank, AfDB and KfW provided the loans directly to the National Treasury for general budget expenditure.
- This collaboration underscores a commitment to critical reforms addressing climate change and the electricity sector.
South Africa has signed major loan agreements with the World Bank, Germany’s Kreditanstalt für Wiederaufbau (KfW), and the African Development Bank (AfDB) for energy transition. These financing arrangements have pushed the country to reach significant milestones in pursuing a just energy transition. These deals also align with South Africa’s Just Energy Transition Investment Plan, supporting the nation’s commitment to building a low-carbon and resilient economy.
The loans result from collaborative efforts between the South African government, the World Bank, KfW, and AfDB. The banks provided the loans directly to the National Treasury for general budget expenditure. This collaboration underscores a commitment to critical reforms addressing climate change and the electricity sector.
The financing terms for the loans are favourable. The World Bank is offering a 15-year term with a 5-year grace period. KfW is providing a fixed interest rate of 4.4 per cent over 12 years with a 3-year grace period, while AfDB is extending a 12-year term with a 2-year grace period. These terms support South Africa’s development objectives and contribute to reducing the government’s public debt.