The African Development Bank (ADB) has approved a $1bn guarantee to support South Africa’s energy transition with support from the UK Foreign, Commonwealth and Development Office (FCDO).
The support will enable the bank to increase its lending capacity to support South Africa’s energy transition.
Developed in close collaboration with the South African government, the programme will support projects aligned with the country’s Just Energy Transition Investment Plan, such as transmission and storage for grid balancing, renewable energy generation, energy efficiency, rehabilitation of municipal electricity distribution networks, green hydrogen and the development of new electric vehicles.
The programme also includes projects related to the “just dimension”, notably in the province of Mpumalanga, located in the north-east of the country, on the border with Swaziland and Mozambique.
The Bank’s approval comes in the middle of the COP28 conference, where the African Development Bank’s Vice President for Power, Energy, Climate and Green Growth, Kevin Kariuki, said: “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, added: “The FCDO remains committed to the Just Energy Transition Partnership with South Africa, which supports green growth and jobs, improves energy security and helps South Africa achieve its carbon reduction ambitions, as set out in its Nationally Determined Contribution.
“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.”