Germany doubles funding to help SA battle climate change

  • Germany has announced a fresh round of development funding co-operation with SA
  • Most of the funds promised will be in support of climate change initiatives
  • The announcement doubles Germany’s contribution to SA’s energy transition

Germany on Friday announced a fresh round of development funding for SA of €355 million (about R6.2 billion) in a combination of grants and subsidised loans over the next two years, most of which is dedicated to the fight against climate change.

The new funding doubles what German will contribute to SA’s energy transition.

The German government has a long history of development co-operation with SA, dating back 30 years. The latest cycle of funding will focus on five areas, including building a peaceful and inclusive society, climate and energy, economic development, training and employment and health.

But the lion’s share – about €301 million- will be dedicated to funding for energy and climate change. The money is a combination of grants (€31 million) and preferential loans of up to €270 million.

This amount comes on top of the funding that Germany has already committed as its contribution to SA’s Just Economic Transition Partnership (JetP). The JetP – a landmark transaction announced at COP26 a year ago – will see five international partners raise $8.5 billion towards SA’s transition to cleaner energy sources.

A spokesperson for the German embassy in Pretoria Christopher Schmidt said in reply to questions over the weekend that Germany’s JetP contribution would be €300m in the form of sovereign loans. This is already in the process of being delivered, he said.

The composition and blend of financing for the JetP has not been announced but is expected to include only a small portion of grant funding, supported by loans. The other countries that are part of the JetP’s International Partner Group are France, the EU, the UK, and the USA.

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Head of the German delegation that negotiated the arrangement, the Director General Africa at the German Ministry for Economic Cooperation and Development Birgit Pickel said in a statement: “The JetP was a milestone in international cooperation and emphasised Germany’s strong commitment to this partnership in order to support clean and just transition towards climate neutrality in South Africa.”

“South Africa and Germany emphasised the importance of the Just component of transition to protect livelihoods and the economic base of the coal basin in policy discussion around JetP,” Pickel said.