The African Development Bank Group’s Board of Directors, in partnership with the UK Foreign Commonwealth and Development Office (FCDO), has sanctioned a $1 billion guarantee program.
This initiative is set to bolster the Bank’s lending capabilities to aid South Africa’s Just Energy Transition (JET). Formulated in conjunction with the South African government, the program is tailored to back projects that align with the country’s JET investment strategy.
These projects span various sectors including renewable energy, energy efficiency, municipal electricity restoration, green hydrogen, and new electric vehicles. A significant focus will also be on the province of Mpumalanga, addressing the equitable aspect of the transition.
The decision, coinciding with COP28, is considered both timely and relevant in the context of escalating climate finance discussions. Dr. Kevin Kariuki, African Development Bank Vice President for Power, Energy, Climate, and Green Growth, highlighted the operation as a testament to the Bank’s innovative financial strategies aimed at enhancing Africa’s access to climate finance.
Melinda Bohannon, FCDO Director General of Humanitarian and Development, emphasized FCDO’s dedication to South Africa’s Just Energy Transition Partnership.
This commitment aims to promote sustainable growth, job creation, energy security, and carbon reduction in line with South Africa’s National Determined Contribution.
Bohannon noted that the guarantee would facilitate funding for projects within South Africa’s Just Energy Transition implementation plan, complemented by increased grants from the International Partners Group.
Mmakgoshi Lekhethe, Deputy-Director General for Asset and Liability Management in South Africa’s National Treasury, expressed satisfaction with the approval of the guarantee framework by the AfDB Board. This framework is expected to elevate South Africa’s access to funding from the Bank.
Lekhethe highlighted the significance of the partnership between South Africa, the UK, and the AfDB in executing a socially responsible energy transition.
She expressed eagerness to collaborate with the AfDB in preparing and financing projects under the JET priority areas, leveraging the Bank’s expertise in guiding just transition initiatives in Africa.
