The World Bank has given South Africa a loan of about $1 billion towards its long-term energy security and transition to a low carbon economy.
Mmakgoshi Lekhethe, Deputy-Director General: Asset and Liability Management, of the National Treasury of South Africa, said “this operation comes at a crucial time for South Africa as it will provide much- needed fiscal and technical support, enabling us to pursue our policy priorities in the energy sector including easing the electricity crisis in the long term, stimulating private sector engagement and creating jobs in the renewables space.”
Marie Francoise Marie-Nelly, World Bank Country Director for South Africa, said the Bank is pleased to support South Africa’s government, which has taken decisive reforms to address the challenges posed by the energy crisis, to the benefit of vulnerable people, the economy and the environment.
A statement from the Bank also acknowledged that South Africa is amongst the world’s top 20 greenhouse gas (GHG) emitters.
Energy represents 81% of South Africa’s emissions, of which 45%comes from electricity.
The loan is expected to enhance economic activity and job creation from new investments in renewable energy generation.
In addition to the development of the energy sector, the finance is purposed to cushion poorer households and businesses, particularly women and Black women-owned businesses, through the provision of credit by commercial banks to enable them to invest in solar technology.
Improvement in the energy sector, is expected to contribute to gradual reductions in water and air pollution, as a result of reduced reliance on coal for power generation.
Responding to a loan from the JETP approved earlier this month, Labour unions (National Union of Mineworkers, NUMSA) , expressed discomfort about the issuing of loans by international organizations, cautioning the country will plunge into further debt, against an economy that is growing slowly, placing jobs at risk.