South Africa will receive a $474.6 million loan from the African Development Bank in a major boost for the country’s electricity and transport infrastructure.
The funds supplement the $1.5 billion loan that South Africa and the World Bank agreed to last month for a comparable use.
Due to frequent power outages, deteriorating transportation systems, and persistently clogged ports, South Africa has struggled to expand for over ten years, hindering key industries such as mining and automotive manufacturing.
According to a statement from the African Development Bank, among other things, the investment was intended to support train modernisation and energy efficiency.
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The World Bank loan, 500 million euros ($590.75 million) from the German development bank KfW, up to $200 million from the Japan International Cooperation Agency, and $150 million from the OPEC Fund for International Development are all included in the international financing package for South Africa, it said.
This funding includes specific grant components to encourage rail sector reforms and energy efficiency measures. Accelerating vertical separation and creating an investment framework to revive South Africa’s goods and logistics systems are top goals.
It is anticipated that these initiatives will boost the transport sector’s competitiveness and support regional integration and economic expansion within the Southern African Development Community.
Being Africa’s most developed economy and a centre of regional influence, South Africa’s energy transition success may spur comparable changes throughout the continent. Other African countries pursuing sustainable development goals will learn a lot from its experience integrating renewable energy, updating its grid, and putting just transition policies into place.
