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The European Investment Bank (EIB) and the Development Bank of Southern Africa (DBSA) have partnered to boost renewable energy projects across South Africa. Both banks have launched a €400 million ($414 million) initiative to support private sector clean energy investments in the Rainbow nation.
The deal was signed at the COP27 in Sharm El Sheikh in Egypt, between EIB’s Vice-President Ambroise Fayolle and DSBA’s CEO Patrick Dlamini. The €400 million initiative will be backed by €200 million from the EIB and provide financing for a range of new investments.
The initiative will increase clean energy generation in South Africa, contributing to DBSA’s Embedded Generation Investment Program (EGIP). The program launched in 2017 aims to support the development and up-scaling of solar PV and wind energy embedded generation projects, developed by independent power producers (IPPs) operating in South Africa.
The new initiative between EIB and DBSA is expected to generate an additional 1200 MW of renewable energy capacity for South Africa’s energy framework and avoid nearly 3.6 million tons of carbon dioxide emissions.
CEO Patrick Dlamini said the DBSA has a coherent goal to increase renewable energy investment as well as improve energy security across the African continent. Most African nations like South Africa are already suffering the effects of climate change. The new investment from the EIB in the EGIP initiative is a significant contribution to the country’s resilient and sustainable growth.
Vice-President Ambroise Fayolle mentioned the deal as the largest-ever EIB investment in South Africa. The investment follows past support for renewable energy and climate adaptation projects across the country.
“The EIB is stepping up our efforts to support green energy projects globally, with a special focus on Africa and economies dependent on carbon-intensive activities that are vulnerable to the impacts of climate change,” Fayolle commented.
The agreement between EIB and DSBA follows the announcement made by the South African government in August to accelerate the deployment of renewable energy across the country by introducing a slew of policy changes and stabilizing its grid to mitigate the country’s blackouts as soon as possible.