The European Investment Bank (EIB), and the Development Bank of South Africa (DBSA), have each committed an additional €100 million (ZAR1.98 billion) to the €400 million (ZAR 7.9 billion) allocated to DBSA’s Embedded Generation Investment Programme in 2022. The initiative is dedicated to financing private sector commercial and industrial (C&I) renewable energy projects in South Africa.
According to DBSA, the financing initiative is part of Global Gateway, Europe’s external strategy for clean and sustainable infrastructure and is aligned with the Just Energy Transition Partnership (JETP) to support South Africa’s decarbonisation efforts with a focus on the electricity system, and comes on top of the EIB’s €1 billion (ZAR19.79 billion) commitment under JETP.
“Our enduring and strong partnership with the EIB has taken an exciting step forward as we increase our financial support for renewable energy,” said DBSA Chief Executive Officer Boitumelo Mosako.
“This collaboration reflects our shared commitment to a greener future. We continue to work closely with our stakeholders, supporting South Africa’s Just Energy Transition (JET) journey. With funded projects now coming online and contributing to the energy grid, we are proud to play a role in driving sustainable growth and energy resilience for South Africa,” added Mosako.
Commenting on the financing initiative, EIB Vice-President Ambroise Fayolle said; “Investing in renewable energy is not only imperative to combat climate change, but it will also lead to more reliable energy supply, which businesses need in order to grow.”
In mid-August 2024, South Africa’s President Cyril Ramaphosa approved the Electricity Regulation Amendment Act which paves way for the end of the monopoly on electricity generation and supply by state utility Eskom. The new regulations now allow for private sector players to generate power and sell to other clients including private companies and municipalities. The move is expected to spur large scale renewable energy deployment in South Africa, particularly in the C&I segment.
DBSA’s Embedded Generation Investment Programme is looking to provide a credit support mechanism that enables funding of embedded generation renewable energy projects, through the provision of risk capital for projects implemented by private sector entities and local municipalities.
“This initiative is a concrete example of the close cooperation between the European Union and South Africa to advance the just energy transition in a way that is sustainable and adds value to South Africa’s economy,” said Sandra Kramer, Ambassador of the European Union to South Africa.
