By Gabriel Ani
PRETORIA (ChatnewsTV) – Agence Française de Développement (AFD) has concluded negotiations for a significant R7.6 billion (€400 million) loan to support South Africa’s Just Energy Transition Plan (JETP), reinforcing the nation’s shift towards a low-emission economy. The announcement comes as AFD marks 30 years of cooperation with South Africa, making this the largest public policy loan in the institution’s history.
The JETP, overseen by South Africa’s Presidential Climate Commission (PCC), aims to ensure that communities reliant on carbon-heavy industries are not marginalized as the country moves towards cleaner energy. It seeks to create new job opportunities, reduce poverty, and guarantee equitable access to energy resources.
“The partnership with the AFD presents an opportunity for South Africa to make progress in addressing practical issues of jobs, skills, social support, and governance,” said Mmakgoshi Lekhethe, National Treasury’s Head of Asset & Liability Management. “To succeed, coordination across all spheres of government is therefore critical.”
AFD’s loan is tied to a series of policy reforms targeting social equity. It builds on a previous €300 million loan provided in 2022, raising France’s overall contribution to the JETP to €700 million out of the €1 billion pledged during COP26 in Glasgow. The loan agreement involves close coordination with the JET Programme Management Unit (JET-PMU) within the Presidency and the National Treasury, focusing on a “just transition” for local communities affected by the shift away from fossil fuels.
“Importantly, we are engaged in addressing the complexity around ensuring that the transition benefits all segments of society with careful planning and implementation,” stated Audrey Rojkoff, AFD’s Regional Director for Southern Africa. “With high levels of commitment, we anticipate positive outcomes throughout the transitioning process.”
The financial terms of the agreement include a 15-year maturity with a two-year grace period, disbursed in equal tranches in 2025 and 2026. The interest rate is set at the 6-month EURIBOR plus 1.66%.
The loan aims to ensure that social outcomes are at the forefront of the energy transition, emphasizing job creation, social justice, and access to electricity. AFD also plans to provide technical cooperation and capacity-building support to South African institutions involved in the JETP.
“National Treasury will continue working through the intergovernmental system to integrate JET into our fiscal policy choices,” added Lekhethe.
