Germany to give South Africa R9.9 billion for Just Energy Transition

Germany, through its KfW development bank, will on Friday sign an agreement to lend South Africa R9.9 billion (€500 million) to help it transition away from the use of coal-fired electricity.

The money forms part of the R160 billion ($8.8 billion) in climate financing offered to South Africa by some of the world’s richest nations in a 2021 agreement known as the Just Energy Transition Partnership.

The loan “is intended to support the South African government in implementing reform measures that contribute to resolving the acute energy crisis in South Africa,” KfW said in a response to a query.

It will also contribute to “a socially acceptable and ecologically sustainable restructuring of the South African energy sector and to combating climate change,” KfW said.

This is a boost for the troubled agreement, which has been beset by delays and political infighting in South Africa. Ruling party ministers and officials have expressed concern that the country is being pushed to close down its coal-fired plants, jeopardizing energy security and threatening jobs.

State-owned power utility Eskom has so far closed down one coal-fired plant under a different agreement and has said that the facility is no longer viable.

South Africa’s National Treasury didn’t respond to a request for comment.