BRICS bank struggling to fund South African energy projects

The New Development Bank, a financial institution created by the BRICS bloc, is struggling to find viable projects to fund as part of its R56 billion ($3 billion) pledge for South Africa’s Just Energy Transition initiative.

“We need bankable projects that have gone through due diligence processes, and there’s a shortage,” Leslie Maasdorp, CFO at the NDB, said in an interview in Johannesburg. “That is the constraint that we face.”

South African power producer Eskom has intensified rolling blackouts since 2008 to reduce reliance on its ailing coal-fired plants. The outages, which sometimes last as long as 12 hours a day, have hurt business productivity and economic growth.

The central bank in July said the sustained reduction in the power cuts, locally known as load-shedding, or greater energy supply from alternative sources, would significantly boost growth.

Energy is the single-biggest focus for the NDB in South Africa as it poses the greatest threat to growth in the country, according to Maasdorp.

“We want to be part of the solution,” he said. “We need to do more project preparation, more capacity building to ensure that the projects that might be in concept make a lot of sense, but it needs to have that commercial viability element embedded.”


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