By Thebe Mabanga
South Africa has secured a €500 million (R10.4 billion) public policy loan from Germany’s state-owned KfW Development Bank to support the implementation of its Just Energy Transition Investment Programme (JETIP).
“Through continued collaboration with South Africa, German Cooperation via KFW Development Bank (KFW) has concluded a €500 million loan for the implementation of the country’s Just Energy Transition (JET).” National treasury said in a statement on Monday.
The loan follows two earlier tranches disbursed in 2022 and 2023, bringing Germany’s total commitment to €1.3 billion (R27 billion).
It forms part of Germany’s contribution to the $8.5 billion (€7.3 billion, R151 billion) pledged at COP26 in Glasgow to support South Africa’s transition to a low-carbon economy.
The latest loan carries a 13-year maturity, a three-year grace period, and an interest rate of 4.31%.
This loan is part of South Africa’s third Development Policy Operation and participants included the World Bank, African Development Bank, Japan International Cooperation Agency, and the OPEC Fund.
It is a combination of concession loans, technical assistance and grants.
Treasury said the loan “supports structural reforms to enhance the efficiency, resilience, and sustainability of the country’s infrastructure services, with a specific focus on the energy sector and climate mitigation.”
Finance minister Enoch Godongwana highlighted the significance of the partnership which he said is “critical to South Africa’s development” and promotes the socio-economic benefits of the country’s energy transition.
Cornelia Tittmann, KFW’s Country Director for South Africa, said that the loan “seeks to support the Government of South Africa’s continued commitment to reforms in the energy sector, that give effect to South Africa’s climate commitments and enable the private sector to participate, opening new avenues to strengthen economic cooperation between Germany and South Africa.”
Other countries that made the pledge to South Africa include the United Kingdom, the , France, Germany, and the European Union (EU) while the United States participation is uncertain under President Donald Trump.
INSIDE POLITICS