The European Investment Bank (EIB) and the Development Bank of South Africa (DBSA) have further boosted their support for renewable energy projects in South Africa’s private sector, aiming to increase clean energy generation, while supporting new jobs.
The financial institutions yesterday announced a €100 million (R1.98 billion) loan to SA, in addition to the €400 million (R7.9 billion) financing announced at COP27 in 2022.
The loan comes as SA is gradually adding renewable energy to the national grid for environmental sustainability, economic growth and energy security.
The country relies heavily on coal for its energy production, which contributes to pollution and greenhouse gas emissions. Around 90% of the country’s electricity comes from coal, making it one of the largest carbon emitters in the world.
Renewable energy sources, such as wind and solar, would reduce dependence on these fossil fuels, helping to lower carbon emissions and mitigate the effects of climate change.
President Cyril Ramaphosa recently said South Africa already has a huge pipeline of renewable energy projects, representing over 22 500MW of new generating capacity, estimated to be worth around R400 billion in new private investment.
In a statement, EIB and DBSA say the financing supports the DBSA’s Embedded Generation Investment Programme for the development and upscaling of small and medium-sized renewable energy projects – in particular solar photovoltaic and onshore wind – by independent power producers in SA.
The financing initiative is part of Global Gateway, Europe’s external strategy for clean and sustainable infrastructure. It is aligned with the Just Energy Transition Partnership (JETP) to support SA’s decarbonisation efforts, with a focus on the electricity system, and comes on top of the EIB’s €1 billion (R19.79 billion) commitment under JETP.
“Our enduring and strong partnership with the EIB has taken an exciting step forward as we increase our financial support for renewable energy. This collaboration reflects our shared commitment to a greener future,” says DBSA CEO Boitumelo Mosako.
“We continue to work closely with our stakeholders, supporting South Africa’s Just Energy Transition journey. With funded projects now coming online and contributing to the energy grid, we are proud to play a role in driving sustainable growth and energy resilience for South Africa.”
“We are proud of the progress of this initiative and our partnership with DBSA,” comments EIB vice-president Ambroise Fayolle. “Investing in renewable energy is not only imperative to combat climate change, but it will also lead to more reliable energy supply, which businesses need in order to grow.”
Says Sandra Kramer, ambassador of the European Union to South Africa: “This initiative is a concrete example of the close cooperation between the European Union and SA to advance the Just Energy Transition in a way that is sustainable and adds value to SA’s economy.”
The EIB and DBSA have combined forces to increase financing for shared priorities since 1995, when the EIB first started working in South Africa.
The organisations say they have co-operated on projects supporting climate action, water, sanitation and education.
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