The African Development Bank (ADB) has greenlit a $1 billion guarantee to support South Africa's ambitious energy transition, backed by the UK Foreign, Commonwealth and Development Office (FCDO). This collaborative initiative is poised to enhance the bank's lending capacity, reinforcing its commitment to advancing projects aligned with South Africa's Just Energy Transition Investment Plan.
In consultation with the South African government, the program encompasses a spectrum of initiatives supporting the country's energy evolution. These include investments in transmission and storage for grid balancing, renewable energy generation, energy efficiency, rehabilitation of municipal electricity distribution networks, green hydrogen projects, and the development of electric vehicles. Special attention is also directed toward the “just dimension,” notably within the province of Mpumalanga, situated in the north-east, adjacent to Swaziland and Mozambique.
Against the backdrop of the COP28 conference, Kevin Kariuki, Vice President for Power, Energy, Climate, and Green Growth at the African Development Bank, remarked, “This is an innovative new transaction that reaffirms the African Development Bank's leadership in developing financial solutions to increase access to climate finance for low-carbon development and Africa's net-zero ambitions.”
Melinda Bohannon, Director-General for Humanitarian and Development at the FCDO, emphasized the commitment to the Just Energy Transition Partnership with South Africa. The collaboration aims to foster green growth, generate employment opportunities, enhance energy security, and assist South Africa in achieving its carbon reduction objectives as outlined in its Nationally Determined Contribution.
Bohannon stated, “This guarantee will unlock funds for projects related to South Africa's recently released Just Energy Transition Implementation Plan. This is in addition to the offer of donations that has recently increased significantly from the International Partners Group, and we are using a portion of these donations to help develop a pipeline of investment projects.”
The collaborative guarantee between the ADB and FCDO stands as a testament to international cooperation in addressing the pressing challenges of climate change and facilitating sustainable, low-carbon development in South Africa.
