By Lesedi Sibiya-Diplomatic Insider

South Africa entered into an agreement with the African Development Bank (AfDB) in which the bank would loan South Africa US$474.4 million in order to implement the Just Energy Transition. 

In collaboration with the World Bank, KFW Development Bank, Japan International Cooperation Agency and the Organisation of the Petroleum Exporting Countries Fund (OPEC Fund) form part of Development Policy Operation, which aims to enhance efficiency and sustainability of South Africa’s infrastructure services.

 The loan agreement is over a 15 year period which will aim to bolster energy transition efforts. The National Treasury has stated that this shift is crucial for South Africa to begin implementing the Just Energy Transition. 

The partnership between South Africa and the African Development Bank serves as the foundation for the country’s developmental agenda, which aims to improve energy security measures while accelerating the decarbonisation of the economy.

 “This new agreement highlights the importance of South Africa’s partnership with the AfDB in advancing South Africa’s developmental agenda. It strengthens efforts to improve energy security measures, accelerate the decarbonisation of the economy, and enhance the socio-economic benefits of the energy transition enabling inclusive economic growth and fostering job creation.” said the National Treasury in their Thursday announcement of the deal. 

“The National Treasury wishes to express its appreciation to the AfDB for its continued partnership and support of South Africa’s development objectives.” they added 

“This includes efforts to implement critical reforms in the energy and transport sectors, while also advancing the country’s Just Energy Transition goals and meeting foreign currency commitment at lower rates.”

This deal also aims to increase on the Socio-economic benefits which comes in tandem with the energy transition which allow for more jobs being created and increase economic growth.