EU pledge €4.7Bn to support South Africa’s energy transition

The European Union (EU) has pledged €4.7 billion in financial support to aid South Africa’s energy transition. This commitment was unveiled at the EU-South Africa summit in Cape Town on March 13. The funding falls under the Global Gateway program, a European-led initiative designed to enhance strategic infrastructure and boost international investments in partner economies.

South Africa relies on coal for over 80% of its electricity generation. Reducing this dependence is a key national priority, with a goal to increase the share of renewable energy in the energy mix to 42% by 2030, up from the current levels of around 20%.

The EU’s funding is primarily directed toward financing renewable energy projects and developing the infrastructure needed to integrate these projects into the national grid. This initiative supports the Scaling Up Renewables in Africa campaign, launched in 2024, which aims to accelerate the expansion of renewable energy capacity across the country.

U.S exit on SA’s Just Energy Transition Partnership (JETP)

The EU’s financial commitment comes in the wake of the United States’ withdrawal from the Just Energy Transition Partnership (JETP), an $8.5 billion financing initiative aimed at helping South Africa move away from coal. The U.S. exit has diminished international funding, impacting Pretoria’s capacity to finance its energy transition.

Against this backdrop, the Global Gateway program allows the EU to deepen its collaboration with South Africa. Current discussions are centered on how to effectively deploy the funds and ensure they align with the country’s energy transition goals.