AFD’s largest-ever loan to fund South Africa’s shift to clean energy while protecting communities and jobs in carbon-intensive sector.
AGENCE Française de Développement (AFD) announced yesterday it has finalised a landmark R7.6 billion loan to drive South Africa’s Just Energy Transition Plan (JETP).
The deal, the largest ever on AFD’s balance sheet, was coordinated closely with South Africa’s JET Programme Management Unit (JET-PMU) and National Treasury, underscoring the intensifying partnership between France and South Africa for a socially equitable energy transition.
This loan builds on the €300 million (R5.7bn) public policy loan provided in 2022, bringing France’s total contribution to the JETP to €700m of the €1bn pledged at COP26 in Glasgow.
The Presidential Climate Commission (PCC), the entity entrusted with overseeing and facilitating the JET, said the programme was designed to ensure that the livelihoods of communities that are tied to carbon-intensive energy sources, such as coal, were not left behind in the transition to a low-emission economy, and that the energy transition is fair.
Deputy Minister of Finance, David Masondo, said, “The partnership with AFD presents an opportunity for South Africa to make progress in addressing practical issues of jobs, skills, social support and governance. National Treasury will continue working through the intergovernmental system to integrate JET into our fiscal policy choices. To succeed, coordination across all spheres of government is therefore critical”.
AFD CEO Rémy Rioux, reflecting on AFD’s 30-year presence in South Africa, said the AFD is working together with JET partners to strike a balance between South Africa’s energy needs and its climate commitments.
“Thirty years after opening its Johannesburg office, AFD is proud to renew and strengthen its long-term support for a just and inclusive energy transition, with a focus on social equity.
The loan is linked to a set of policy reforms aimed at ensuring a just transition and AFD said it was putting a robust monitoring and evaluation framework in place to track the progress of these reforms.
“South Africa’s JET is supported by a strong governance and institutional framework that includes the PCC, a dedicated JET-PMU, a comprehensive investment plan, underpinned by support from international partnerships with France and several other countries,” it said.
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