AFD marks 30-year SA partnership with R7.6bn energy transition loan

The French Development Agency (AFD) has been active in South Africa since 1994, focusing on sustainable development, climate action, and infrastructure. A key area of collaboration between the AFD and South Africa is the Just Energy Transition Plan, which aims to shift the country from coal to cleaner, renewable energy sources. Recently, the AFD has concluded negotiations for a R7.6 billion loan to support this transition. In a recent interview with CNBC Africa, the CEO of the AFD, Remy Rioux, discussed the agency's commitment to South Africa's energy transition plan and the specific projects already in progress. During the interview, Rioux highlighted the agency's role in supporting the Just Energy Transition Framework scheme in South Africa. He emphasized the importance of ensuring the energy transition is fair and just, incorporating a social dimension to support communities affected by the shift. Rioux mentioned that the AFD has already delivered 70% of the pledge made by Presidents Macron and Ramaphosa back in 2021 at COP26 in Glasgow. One of the key projects already in progress is the deployment of 70,000 smart meters in municipalities, particularly in Bumalanga, to increase energy access and revenue collection. This initiative aims to provide fair access to energy, especially in rural areas where 10% of the population currently lacks access. Additionally, the project is expected to create about 40,000 new jobs, with 80% benefiting youth and 65% benefiting women. This collaborative effort involves various stakeholders, including the national treasury, Development Bank of Southern Africa (DBSA), and Industrial Development Corporation (IDC). The AFD ensures effective coordination with local stakeholders by engaging at both national and municipal levels. Rioux mentioned having meetings with Deputy Minister Massondo, the national treasury, central banks, and the presidential climate commission to align efforts. The agency also has a long history of municipal financing in South Africa, working closely with cities like Durban, Cape Town, and Johannesburg. Additionally, the AFD collaborates with other international partners and public development banks active in South Africa to mobilize resources for sustainable development. Rioux also addressed the importance of private sector involvement in South Africa's energy transition. He highlighted that 85% of investments are private, making the private sector a crucial player in the transition. The AFD works with its subsidiary, Proparco, specialized in engaging with the private sector and mobilizing private finance for sustainable projects. Collaborating with private companies and ensuring public and private finance alignment is essential for the success of the energy transition. In conclusion, the AFD's commitment to supporting South Africa's Just Energy Transition Plan demonstrates a strong partnership focused on sustainable development and climate action. The agency's cooperation with various stakeholders, including the government, local municipalities, and the private sector, underscores a collective effort to drive positive change and create a more sustainable energy future for South Africa.