South Africa gets €500 million German loan for energy transition

South Africa is to receive a €500 million ($588 million) loan from the German state-owned development bank KfW.

The German Development Minister, Reem Alabali Radovan, announced the loan on Friday during her first trip to the African continent.

The money is intended to help South Africa implement planned reforms that create favourable conditions for private sector investment, including the expansion of networks for solar and wind power plants.

“Climate protection is a task that we can only achieve through joint global efforts,” said Radovan, who travelled to South Africa for the G20 Development Ministers’ Meeting.

The minister emphasized that German companies and developers active in solar expansion in South Africa would also benefit from the energy partnership.

The loan is part of the Just Energy Transition Partnership, a trade initiative launched under the German G20 presidency to promote investment in climate protection, the economy and the energy transition.

In addition to Germany, the United Kingdom, France, the Netherlands, Denmark and the European Union are also involved.

South Africa still generates around 80% of its electricity from fossil fuels, making the country, with a population of 65 million, one of the world’s largest CO2 emitters.

However, thanks to its geographical location, South Africa has enormous potential for solar and wind energy.