Adesina says South Africa is bankable

Adesina says South Africa is bankable

The African Development Bank has put its faith in South Africa by committing USD2.8-billion over the next five years. A large chunk of this funding will go towards transforming the country’s energy sector. 

The funding will support public and private sector investments especially in the priority areas of agriculture, renewable energy, transport, youth employment, health, and vaccines manufacturing.

About USD400-million (R6-billion) of the USD2.8-billion is earmarked to save South Africa’s beleaguered power utility Eskom and to kickstart the country’s energy transition to a greener future. South Africa is still largely dependent on coal fired power stations to generate electricity, despite efforts to move away from fossil fuels.

According to South African President Cyril Ramaphosa, no country can operate without a reliable supply of electricity. Ramaphosa was speaking at the opening of the South Africa Investment Conference in Johannesburg yesterday. He said ongoing reforms to the energy sector included changes to Eskom and additional generation capacity mainly through wind and solar sources of energy. Ramaphosa announced that a presidential task team set up to advance the country’s just energy transition to a low-carbon transmission economy, was on track.

At the same conference African Development Bank Group President Dr. Akinwumi A. Adesina pledged his institution’s support for South Africa, saying: “We know that South Africa is bankable.”

In his opening address Ramaphosa said that South Africa faces huge challenges, but that it also offers great opportunities and promise. “Our economy has been severely damaged with the loss of two million jobs. I am here to share with you what has been done and what we are doing,” said Ramaphosa.

He outlined measures his government has made, including social and economic relief packages, describing them as “difficult but necessary reforms” in energy, state-owned enterprises, and the fiscal and taxation sectors, to drive economic growth.

Adesina said the African Development Bank was working with international partners, especially the G7 countries, to establish a just energy transition facility that will support South Africa in raising at least USD27-billion.

“We will do it without South Africa going into debt,” Adesina said. “I applaud the G7 countries, for their commitment of USD8.5-billion in support of South Africa’s just energy transition.”

The African Development Bank Group’s active portfolio in South Africa comprises 23 operations with a total commitment of about USD4.5-billion in financing. Since 1997, the Bank has invested nearly USD7-billion in the country in energy and infrastructure.

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