The African Development Bank (ADB) has approved a $1 billion guarantee to support energy transition in South Africa.
The support comes via the UK Foreign, Commonwealth and Development Office (FCDO). This means the bank can increase its lending capacity to support energy transition.
According to the bank, the program will support projects aligned with the country's Just Energy Transition Investment Plan, that includes “transmission and storage for grid balancing, renewable energy generation, energy efficiency, rehabilitation of municipal electricity distribution networks, green hydrogen and the development of new electric vehicles,” a local report mentioned.
African Development Bank's Vice President for Power, Energy, Climate and Green Growth, Kevin Kariuki, recently remarked, "This is an innovative new transaction that reaffirms the African Development Bank's leadership in developing financial solutions to increase access to climate finance for low-carbon development and Africa's net-zero ambitions."
Meanwhile, Melinda Bohannon, Director-General for Humanitarian and Development at the FCDO, stated, "The FCDO remains committed to the Just Energy Transition Partnership with South Africa, which supports green growth and jobs, improves energy security and helps South Africa achieve its carbon reduction ambitions, as set out in its Nationally Determined Contribution.”
The latest guarantee is expected to help develop a pipeline of investment projects in South Africa.