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African Development Bank Group (AfDB) President Dr Akinwumi Adesina has assured South Africa of the bank’s strong support as the country transitions from fossil fuel to renewable energy
Adesina told minister for Mineral Resources and Energy, Gwede Mantashe, that the bank was in the process of setting up an African Energy Transition Facility to help South Africa secure adequate financing for its energy transition.
He said: “South Africa cannot and should not embark on the journey of energy transition without the necessary financial support.” He said through the African Energy Transition Facility, “South Africa can leverage on the $8.5 billion in grants from the G7 countries to generate all the money it needs for its just energy transition without getting into debt.”
The AfDB estimates that South Africa would need more than US$30bn for transition to renewable energy.
The bank is financing several renewable energy projects in South Africa, including the 100MW Sere wind power plant, the 100MW Xina solar power concentrated power plant, and the 100MW Red Stone solar project. The bank is also preparing a US$4000mn package to support the country’s electricity utility company, Eskom, as it transitions to renewable energy.
Adesina and Mantashe met in South Africa’s Pretoria and discussed a range of opportunities for the country, which relies on coal for 75% of its energy needs. They also discussed the impact on Africa of Russia’s war in Ukraine, which has already led to an increase in the prices of food, fertilizer, oil and gas.