Germany to lend South Africa R10-billion for energy switch

November 17, 2023 Siyabonga Mtangana

Germany, through its KfW development bank, will as soon as Friday sign an agreement to lend South Africa €500-million (R10-billion) to help it transition away from the use of coal-fired electricity, people with knowledge of the pact said.

The money forms part of the US$8.8-billion in climate financing offered to South Africa by some of the world’s richest nations in a 2021 agreement known as the Just Energy Transition Partnership, the people said, asking not to be identified as the information isn’t public yet.

The loan is a boost for the troubled agreement, which has been beset by delays and political infighting in South Africa. ANC ministers and officials have expressed concern that the country is being pushed to close down its coal-fired plants, jeopardising energy security and threatening jobs.

State-owned Eskom has so far closed down one coal-fired plant under a different agreement and has said that the facility is no longer viable.

National treasury didn’t respond to a request for comment. Spokesmen for the German economy ministry and the KfW did not immediately respond to requests for comment. A call to KfW’s South African office didn’t connect.

The JETP — an agreement between South Africa, France, Germany, the US, the UK, the European Union, Denmark and the Netherlands — is seen as a prototype for similar agreements with Indonesia, Vietnam and Senegal. — (c) 2023 Bloomberg LP