By Lesedi Sibiya-Diplomatic Insider
South African President Cyril Ramaphosa alongside Ursula Von der Leyen who serves as European Commission President have announced that the European Union (EU) will invest 11.5 billion euros (R229 billion) to South Africa via the European Union’s Global Gateway Investment Package. The announcement was made on Friday 10 October.
This investment will aim to boost South Africa’s economy by enhancing job creation, infrastructure, which will include energy.
The injection of these funds equates to 10% of the government’s annual budget. South Africa’s economic growth per annum sits at 1% since 2008 and has struggled to secure investments that are needed in order for the country to achieve the 3% growth rate which is required to decrease the unemployment rate which sits at 42.9%.
The European investment package will aim to raise European investments in South Africa as R173 billion will go into the Just Energy Transition, which will include allocation for beneficiating raw materials, critical and local minerals from a local standpoint.
It will also help sustain and create local industries and value chains. The investments will include green hydrogen, which is regarded as a priority growth sector which will aim to unlock local industries. Renewable energy investments will also be a priority by using wind and solar power in order to reduce the country’s carbon footprint.
That package has also allocated R24 billion to the Just Component of the Energy Transition, as this aims to include the re-skilling of at-risk workers and giving affected communities job opportunities.
Support will be given towards green municipal infrastructure, as well as expanding access to clean water and creating more efficient waste management.
Most municipalities have lost a third of their water due to leaks in infrastructure as South Africa sits in the top 30 of water scarce countries in the world. This intervention will ensure that all affected communities and farms around the country receive better access to clean water.
Other uses of this investment will include water security, climate resilient infrastructure as well as sustainable land management.