The Development Bank of Southern Africa (DBSA) and the European Investment Bank (EIB) have announced an additional R3.96 billion in financing for private renewable energy projects in South Africa, the organisations have said in a joint statement.
This boost is to scale up solar photovoltaic and onshore wind developments by independent power producers, supporting the country’s transition to cleaner energy.
The funding comes as part of a broader lending initiative launched at the COP27 UN climate summit nearly two years ago, where the institutions initially committed R7.9 billion (€400 million).
This latest announcement raises their collective support to R11.9 billion (€600 million), highlighting the critical role international development finance continues to play in South Africa’s renewable energy sector.
“The financing supports the DBSA's Embedded Generation Investment Programme for the development and upscaling of small and medium-sized renewable energy projects,” the two institutions said.
The programme is part of the European Union's Global Gateway strategy, which focuses on sustainable infrastructure and is aligned with the Just Energy Transition Partnership (JETP).
The EU has already committed R19.79 billion (€1 billion) to the JETP, alongside contributions from the UK, US, Germany, and France.
Boitumelo Mosako, CEO of the DBSA, highlighted the importance of this expanded partnership: "Our enduring and strong relationship with the EIB has taken an exciting step forward as we increase our financial support for renewable energy. With funded projects now coming online and contributing to the energy grid, we are proud to play a role in driving sustainable growth and energy resilience for South Africa."
The projects financed under this initiative are expected to add 384 MW of new renewable energy capacity to South Africa’s energy grid, supplementing the 1,200MW supported under the original programme.
EIB vice-President Ambroise Fayolle has praised the progress: "Investing in renewable energy is not only imperative to combat climate change, but it will also lead to a more reliable energy supply, which businesses need to grow."
The additional funding is particularly timely, as South Africa continues to grapple with energy supply issues driven by its over-reliance on coal and an ageing infrastructure. Experts argue that while such financial initiatives are crucial, they represent only a fraction of the investment needed to transition the country’s energy system.
In addition to the renewable energy projects, the EIB announced this week that it will commit R630 million in grants to boost South Africa's green hydrogen industry, further supporting the country’s ambitious decarbonisation targets.
Transnet, South Africa’s state-owned logistics company, will receive part of this funding to achieve its goal of net-zero emissions by 2040, focusing on transforming its ports, rail, and pipeline infrastructure.
IOL