APA-Johannesburg (South Africa) The African Development Bank has approved a US$1 billion guarantee programme in collaboration with the UK Foreign Commonwealth and Development Office (FCDO) to finance Just Energy Transition activities in South Africa, the AfDB has announced.
Developed in close collaboration with the South African government, the activities in the programme are expected to support projects aligned with the country’s Just Energy Transition investment plan such as transmission and grid-balancing storage, renewable energy generation, energy efficiency, rehabilitation of municipal electricity delivery, green hydrogen, and new electric vehicles.
The collaboration with the FCDO would allow the bank to increase its lending capacity in support of the country’s energy transition programme, the AfDB said.
The approval, coming during the COP28 summit being hosted in Doha, Qatar, where ramping-up climate finance was an issue, was “timely and topical,” AfDB vice president for power, energy, Climate and green growth Kevin Kariuki said.
“This is another innovative operation that reaffirms AfDB’s leadership in crafting financial solutions to increase access to climate finance for Africa’s low carbon development and net zero ambitions,” Kariuki said.
FCDO director general of humanitarian and development Melinda Bohannon, said her organisation remained committed to the JET partnership with South Africa in support of green growth and jobs, in improving its energy security, and in helping the country to achieve its carbon reduction ambitions as set out in its national determined contribution.
“This guarantee will unlock funds for projects within the remit of South Africa’s recently released Just Energy Transition implementation plan,” Bohannon said.
She added: “This comes alongside the recently significantly increased grant offer from the international partners group (investors) — and we are using some of those grants to help develop an investment project pipeline.”
Deputy director general for asset and liability management in South Africa’s Ministry of Finance Mmakgoshi Lekhethe said the country was ”pleased with the approval by the AfDB board of the guarantee framework that would increase South Africa’s access to funding from the Bank by $1 billion.”
This marked an important partnership between our government, the UK and AfDB to enhance our ability to implement South Africa’s just energy transition in a way that is just and socially responsible, she said.
NM/jn/APA