AfDB Approves $474.6M Loan to Power South Africa’s Green Growth and Energy Reform
The African Development Bank Group (AfDB) has approved a $474.6 million loan to support South Africa’s Infrastructure Governance and Green Growth Programme (IGGGP), marking a significant step in the country’s transition to a low-carbon economy and strengthening its infrastructure governance.
The funding forms the second phase of AfDB’s strategic support for South Africa’s Just Energy Transition, building on a $300 million programme approved in 2023. The IGGGP will focus on three interconnected pillars: restructuring the power sector for energy security, enabling a just and low-carbon transition, and improving transport efficiency.
Finance Minister Enoch Godongwana acknowledged the importance of the programme amid ongoing challenges. “Our country faces significant energy shortages and transport bottlenecks. With your partnership, we commit to implementing reforms that drive growth and fulfill our climate commitments,” he said.
The IGGGP prioritizes green industrialization, electric vehicle manufacturing, green hydrogen production, and job creation, with the IMF projecting a 0.2–0.4% annual GDP boost through 2030. Women will benefit from 70% of the expanded Social Employment Fund, and youth-focused skills programs will fuel participation in the emerging green economy.
Kennedy Mbekeani, AfDB’s Director General for Southern Africa, called the loan “a blueprint for Africa’s energy future,” underscoring South Africa’s potential to lead continent-wide sustainable development.
This funding is part of a broader $2.78 billion package involving the World Bank, Germany’s KfW, Japan’s JICA, and the OPEC Fund. It aligns with South Africa’s updated Paris Agreement commitments to reduce carbon emissions to 398–510 million tons by 2025 and 350–420 million tons by 2030.
