SOUTH AFRICA – The European Investment Bank (EIB) and the Development Bank of Southern Africa (DBSA) have increased their financial commitment to renewable energy in South Africa, bringing the initiative’s total to US$665.57 million (ZAR 11.9 billion).
The new funding, comprising US$110.93 million (ZAR 1.98 billion) from each institution, builds on the US$443.72 million (ZAR 7.9 billion) pledged during COP27 in 2022.
This initiative aims to accelerate the growth of private sector-led solar and wind energy projects, supporting South Africa’s efforts to transition towards cleaner, more reliable energy sources.
Expanding renewable capacity and job creation
The additional funding is directed towards DBSA’s Embedded Generation Investment Programme, which facilitates developing small to medium-sized renewable energy projects by independent power producers.
These projects primarily focus on solar photovoltaic and onshore wind energy and are expected to generate 384 MW of new renewable energy capacity.
This expansion will contribute to a cleaner energy grid and create jobs, supporting economic growth while addressing South Africa’s persistent energy challenges.
The financing initiative is part of the European Union’s Global Gateway strategy, which seeks to promote sustainable infrastructure worldwide.
It is also in line with the Just Energy Transition Partnership (JETP), a multinational effort supporting South Africa’s shift from coal dependency to renewable energy.
The EIB’s increased support adds to its US$1.11 billion (ZAR 19.79 billion) commitment to JETP, focusing on decarbonizing South Africa’s electricity system while ensuring the transition is socially and economically inclusive.
“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,” said Boitumelo Mosako, Chief Executive Officer of DBSA.
She added that the projects financed under this initiative are already coming online and contributing to the country’s energy grid, strengthening energy resilience and sustainable growth.
This comes as South Africa is steadily advancing its renewable energy sector, driven by solar and wind power projects.
The country has committed to reducing its reliance on coal, which currently generates the majority of its electricity.
According to the Centre for Renewable and Sustainable Energy Studies (CRSES), the majority of South Africa’s electrical energy in 2023/24 was generated from coal (78.5% of total system demand), with renewable energy providing 8.8%.
The South African system was unable to provide 4.4% of the electricity demand (mainly load shedding).
Through the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and international partnerships like the Just Energy Transition Partnership (JETP), South Africa aims to increase renewable energy capacity and meet its decarbonization goals, supporting energy security and addressing climate change challenges.
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