South Africa Secures Concessional Financing For Just Energy Transition From World Bank, KfW, And AfDB

South Africa has reached significant milestones in its pursuit of a Just Energy Transition, signing crucial loan agreements with the World Bank, Germany’s Kreditanstalt für Wiederaufbau (KfW), and the African Development Bank (AfDB). These concessional financing arrangements align with South Africa’s Just Energy Transition Investment Plan, supporting the nation’s commitment to building a low-carbon and resilient economy.

The loans, provided directly to the National Treasury for general budget expenditure, result from collaborative efforts between the South African government, the World Bank, KfW, and AfDB. This collaboration underscores a commitment to key reforms addressing climate change and the electricity sector.

The financing terms for the loans are favorable, with the World Bank offering a 15-year term with a 5-year grace period, KfW providing a fixed interest rate of 4.4% over 12 years with a 3-year grace period, and AfDB extending a 12-year term with a 2-year grace period. These terms not only support South Africa’s development objectives but also contribute to reducing the government’s public debt, thanks to affordable rates.

The National Treasury expresses its gratitude to the World Bank, KfW, and AfDB for their continued support, marking a positive step in South Africa’s journey toward a sustainable and resilient energy future.