- The National Treasury has announced that it has signed loan agreements with three banks to focus on Just Energy Transition.
- The financial institutions are the World Bank, Kreditanstalt für Wiederaufbau, and African Development Bank.
- The combined loans total more than $1.8 billion.
With this week’s local news dominated by allegations of Rand manipulation at banks, as well as loadshedding on the rise, some may have divisive feelings about three new loan agreements that have been signed by the National Treasury when it comes to Just Energy Transition.
Here the South African government has secured loans from the World Bank, Kreditanstalt für Wiederaufbau (German state-owned), and the African Development Bank.
Per SA News, the respective loans are $1 billion from the World Bank, $543 million from kFW and $300 million from the African Development Bank, bringing the total close to $2 billion.
The Treasury confirmed that the former loan is to be repaid over a period of 15 years, while the latter two will be over 12 years. There are also different grace periods that have been baked into the agreements.
According to the National Treasury, these loans are aimed at supporting government in its efforts to bring sustainable energy solutions to the country, but given that there has been little respite from constant loadshedding this year, it remains to be seen whether effective projects will be rolled out quickly enough to meet the dire energy needs of many South Africans.
“The financing facilities from the three development institutions are in line with the National Treasury’s funding strategy to diversify its funding mix for international borrowing and access concessional financing instruments offered by the development partners to support government’s key reforms under climate change and the electricity sector,” the Treasury noted in a statement.
“These agreements signify and reinforce the excellent collaborative efforts between the Government of Germany, World Bank and AfDB and our government, that has ensured the successful conclusion of the loans,” it added.
With watchdogs keeping a closer than ever eye on how government spends taxpayer money these days, all are hoping that this near $2 billion in loans is put to use effectively, and does not find its way into the pockets of corrupt politicians, as has often been the case in recent years.