Transnet gets over 300 million euro loan from France

South Africa has secured a loan of $345.78 million from the French Development Agency (AFD) as part of a larger financing commitment from France and Germany, reports Cape {town} Etc.

Each nation is extending €300 million in concessional financing to support South Africa’s efforts in reducing its dependence on coal while advancing its Just Energy Transition (JET) ambitions.

The loan agreements were officially signed during a ceremony at the 27th United Nations Climate Change Conference (COP27) in Sharm El Sheikh, Egypt, an event marked by the presence of key leaders, including South African President Cyril Ramaphosa, French President Emmanuel Macron, and German Chancellor Olaf Scholz.

This collaboration represents a significant milestone since the JETP was first announced at COP26 in November 2021.

The Just Energy Transition Partnership is a groundbreaking initiative aiming to facilitate South Africa’s move towards a low-carbon economy. The commitment, involving international partners such as the United Kingdom and the United States, initially pledged to mobilise 8.5 billion dollars over a span of three to five years, laying the groundwork for a sustainable economic future.

As Andreas Peschke, the German Ambassador to South Africa noted, this recent financing underscores a concrete step towards realising the partnership’s goals.

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France’s support echoes President Macron’s commitment from last year, with Arnaud Roux, Chargé d’affaires at the French Embassy, stating, ‘We are now putting those words into actions with this important loan.’ He emphasised.

Amidst the growing urgency to address climate change, the coal sector continues to play a critical role in South Africa’s economy, providing electricity to millions and sustaining numerous jobs. However, the need for a transition has never been more pressing.

AFD’s Regional Director for Southern Africa, Audrey Rojkoff, highlighted that most nations are navigating the complex balance between immediate economic pressures and a sustainable future where both nature and society can thrive.

‘This first public policy loan aims to promote policy dialogue between our countries,’ she remarked.

Silke Stadtmann, Country Director for KfW Development Bank, further underscored the significance of South Africa’s commitment to reducing coal reliance, calling it ‘an important step in achieving the country’s climate goals,’

The financing is set to assist South Africa in critical investments and reforms within its energy sector.

Ismail Momoniat, Acting Director General of the National Treasury, expressed the government’s gratitude for the concessional funding from AFD and KfW, viewing it as a vital component in tackling South Africa’s ongoing socio-economic challenges.

‘This funding will assist in addressing the challenge of financing the critical adaptation and mitigation programmes,’ he stated.

Transnet Group’s Chief Executive, Michelle Phillips, articulated the broader impact of the funding, revealing that it will significantly support Transnet’s decarbonisation goals while also exploring strategic opportunities within the green hydrogen value chain.

‘This initiative will contribute significantly to supporting clean energy initiatives under the capital investment programme,’ she noted.