Zuko Komisa
SA signs $1 billion loan agreement for the country’s Just Energy Transition.
South Africa has signed bilateral loan agreements with the World Bank, the African Development Bank (AfDB), and the German state-owned development and investment bank Kreditanstalt für Wiederaufbau (KfW), according to the country’s national Treasury.
A loan of about $1 billion from the World Bank, about $500 million from KfW, and an additional $300 million from the AfDB make up the concessional financing.
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National Treasury has stated says these are sovereign loans provided directly to the National Treasury for general budget expenditure purposes and that the aim of borrowing the money is to support South Africa’s Just Energy Transition.
“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,”
National Treasury statement
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