The African Development Bank (AfdB) has agreed to fund the Eskom transition to a low emissions economy in SA.
The AfDB said on Thursday that it would extend a $2.8-billion facility to SA over the next five years in order to go through with the funding.
AfDB President, Akinwumi Adesina, made the pledge at the SA Investment Conference in Sandton.
“The facility will fit well with the debt funding plan of the National Treasury, which is to increase borrowings from international finance institutions, which offer loans at concessional rates.”
Adesina stated that $400 million was set aside for Eskom to implement the transitions to renewable energy out of the $2.8-billion facility.
The AfDB is part of the consortium of international finance institutions which in November at the COP26 conference on climate change, pledged to help raise $8.5 billion to establish a just energy transition facility.
On announcing the facility, Adesina stated that the financing will encourage public-private sector investments in top areas of agriculture, renewable energy, transportation, healthcare, vaccines manufacturing, and also create employment opportunities for youth among others.
He made it clear that investing in South Africa will bring profit and success.
The bank is already involved in financing 23 projects in SA with a total commitment of about $4.5 billion in financing. Since 1997, the bank has invested nearly $7 billion in the country in energy and infrastructure.
SA has an IMF loan of $4.3 billion; a World Bank loan of $750 million; and two $1-billion loans from the New Development Bank.