France’s state development bank is considering loaning South Africa about €300 Million ($329 million) in what would be its second disbursement under a climate-finance pact between the African nation and some of the world’s richest countries, people familiar with the situation said.
Author of the article:
Bloomberg News
Antony Sguazzin
Published Oct 09, 2024 • 1 minute read
(Bloomberg) — France’s state development bank is considering loaning South Africa about €300 Million ($329 million) in what would be its second disbursement under a climate-finance pact between the African nation and some of the world’s richest countries, people familiar with the situation said.
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France Weighs Climate Loan of About €300 Million to South Africa Back to video
The 20-year loan, the exact size of which is yet to be finalized, is being considered by the board of the bank, Agence Francaise de Developpement, the people said, asking not to be identified as details haven’t been made public.
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“We are in the final stages of preparing a second loan,” adding to the €300 million we distributed about 18 months ago, David Martinon, France’s ambassador to South Africa, said in a speech in eMalahleni, east of Johannesburg, on Wednesday. He didn’t give further details.
The loan, if made, would be a shot in the arm for the Just Energy Transition Partnership, or JETP, which has been criticized for the slow pace of disbursement of the $9.3 billion pledged to South Africa by France, Germany, the US, UK, European Union, Netherlands and Denmark.
In addition to the earlier financing from France, Germany has lent South Africa a cumulative €800 million euros, but little other money has flowed since the pact was agreed in 2021 aside from some grant payments. The plan aims to help wean South Africa off the use of coal, which currently accounts for about four-fifths of its electricity generation.
South Africa’s National Treasury acknowledged receipt of a query about the facility but didn’t immediately respond. The money would be lent as a so-called policy loan, which is made directly to the Treasury. Other members of the JETP, such as the UK, don’t favor use of the instruments.
South Africa’s JETP is seen as a prototype for similar agreements that have been concluded with Indonesia and Vietnam.
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