South Africa has received $474.6 million loan from the African DDevelopment Bank (AfDB) to transition toward a greener, more inclusive economy.
Part of the financing will be channeled to support the Infrastructure Governance and Green Growth Programme (IGGGP).
This initiative builds on the success of a previous $300 million programme launched in 2023, which helped improve renewable energy capacity and stabilize energy governance.
The IGGGP focuses on three key areas including reforming the energy sector, enabling a just and low-carbon transition, and addressing critical transport inefficiencies.
South Africa is tackling deep-rooted challenges like power shortages and logistical bottlenecks that hinder growth.
“Our government has committed itself to stay the course and implement these critical reforms in the energy and transport sectors,” said Finance Minister Enoch Godongwana.
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The programme also promotes green industrialization, job creation, and skills development, with a strong focus on sectors like electric vehicle manufacturing and green hydrogen.
The International Monetary Fund has projected that South Africa’s Just Energy Transition could lift GDP growth by 0.2 to 0.4 percentage points annually between 2025 and 2030.
According to Kennedy Mbekeani, the African Development Bank’s Director General for Southern Africa, this approval “represents more than financing — it’s a blueprint for Africa’s energy future.”
South Africa’s leadership in clean energy and its commitment to social inclusion set a precedent for other countries in the region.
The programme also features targeted grants to support energy efficiency and overhaul the rail transport system.
Priorities include separating operations within the power sector and establishing an investment framework to rejuvenate freight and logistics infrastructure. These upgrades are expected to enhance competitiveness and drive regional economic integration.
This funding forms part of a broader $2.78 billion international package that includes contributions from the World Bank, Germany’s KfW, Japan’s JICA, and the OPEC Fund, demonstrating the global importance of South Africa’s energy transition as it leads within the G20.
