AFDB Approves $474.6 Million Loan to Support South Africa’s Green Growth and Infrastructure Reforms

 

The African Development Bank (AfDB) has approved a $474.6 million loan to support South Africa’s Infrastructure Governance and Green Growth Programme. This marks a major step in the country’s transition to a low carbon and sustainable economy and forms the second phase of AfDB’s strategic support for South Africa’s Just Energy Transition. It builds on the earlier $300 million Energy Governance and Climate Resilience Programme launched in 2023.

The programme focuses on three pillars: restructuring the power sector to enhance energy security, promoting a low carbon and just transition, and improving transport efficiency. It also emphasizes green industrialization, including support for electric vehicle manufacturing and green hydrogen production. The initiative includes job creation and skills development, with a strong focus on gender and youth empowerment. Seventy percent of beneficiaries from the Social Employment Fund will be women, while youth-focused programmes will equip the next generation for careers in the green economy.

South African Finance Minister Enoch Godongwana welcomed the support, highlighting the country’s ongoing challenges with energy shortages and transport inefficiencies. He reaffirmed the government's commitment to reform while meeting international climate obligations.

AfDB Southern Africa Director General Kennedy Mbekeani stated that the loan represents more than financial assistance, describing it as a blueprint for Africa’s energy future. The project also includes targeted grants for energy efficiency and railway sector reforms, aiming to boost freight and logistics competitiveness.

The programme supports several UN Sustainable Development Goals and is part of a broader $2.78 billion international financing package that includes contributions from the World Bank, Germany’s KfW, Japan’s JICA, and the OPEC Fund. The initiative aligns with South Africa’s climate targets under the Paris Agreement and underscores its leadership during its G20 presidency.

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