South Africa signs loan agreements to support Just Energy Transition

National Treasury has announced that South Africa has signed bilateral loan agreements with the World Bank, German state-owned development and investment bank Kreditanstalt für Wiederaufbau (KfW) and the African Development Bank (AfDB) to support South Africa’s Just Energy Transition.

The concessional financing includes a loan of some $1 billion from the World Bank, some €500 million from KfW and a further $300 million from the AfDB.

“The loans provided by [KfW] and the [AfDB] follow their partnership with the World Bank on the second Development Policy Operation DPO to support South Africa’s commitment to the just transition for a low-carbon and resilient economy. These are sovereign loans provided directly to the National Treasury for general budget expenditure purposes.

“The financing facilities from the three development institutions are in line with the National Treasury’s funding strategy to diversify its funding mix for international borrowing and access concessional financing instruments offered by the development partners to support government’s key reforms under climate change and the electricity sector.

“These facilities also enable the National Treasury to raise funding at very affordable rates which help to reduce the government public debt,” Treasury said in a statement.

The department expressed its gratitude to the three institutions.

“These agreements signify and reinforce the excellent collaborative efforts between the Government of Germany, World Bank and AfDB and our government, that has ensured the successful conclusion of the loans,” the statement concluded. – SAnews.gov.za