The Agence Française de Développement (AFD) has reaffirmed its commitment to supporting South Africa's energy transition with investments exceeding 4 billion euros over the past 30 years. This funding is part of a broader initiative aimed at facilitating a fair and sustainable transition from coal to renewable energy sources, reflecting AFD’s long-term partnership with South Africa that began in 1994. The partnership has focused on various sectors, including energy, water, transport, and urban development, aiming to promote inclusive growth and environmental sustainability.
South Africa faces significant energy challenges, primarily due to its heavy reliance on coal-fired power generation, which accounts for about 80% of its electricity supply. This dependence has made the country one of the highest carbon emitters globally, prompting urgent calls for action to reduce greenhouse gas emissions. The South African government has set ambitious targets to phase out coal and increase the share of renewable energy in its electricity mix. By 2030, the goal is to achieve at least 38% of electricity from renewable sources while limiting fossil fuel reliance to a maximum of 48%.
AFD's investment aligns with the Just Energy Transition Partnership (JET-P), an initiative established during the COP26 climate conference in Glasgow. Under this partnership, South Africa is set to receive up to $8.5 billion from various international partners over the next few years to facilitate its transition away from coal. This funding will support projects that promote renewable energy development, such as solar and wind power, as well as enhance energy efficiency across the country.
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A critical aspect of AFD's strategy is ensuring that the transition is socially responsible, particularly for communities and workers directly affected by the decline of the coal industry. With approximately 90,000 people employed in coal-related jobs, there is an urgent need for alternative employment opportunities as South Africa moves towards greener energy solutions. AFD plans to invest not only in renewable energy projects but also in vocational training and support for sectors like green hydrogen and electric vehicles, which could create new job opportunities.
In addition to financial support, AFD aims to foster collaboration between local stakeholders and international experts. By providing technical assistance and innovative financing solutions, AFD hopes to enhance South Africa's capacity to implement its energy transition effectively. This includes developing infrastructure for renewable energy generation and improving grid services necessary for integrating intermittent power sources.
One notable project supported by AFD is the Tubatse Pumped Storage System in Limpopo Province. Recently, AFD signed a grant agreement worth €6.5 million with Eskom, South Africa's state-owned electricity utility, to assist in developing this major infrastructure project. The Tubatse system will have a power generation capacity of 1.5 GW and will play a crucial role in stabilizing the grid as more renewable energy sources come online.
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As South Africa embarks on this transformative journey towards a low-carbon economy, AFD's commitment reflects a growing recognition among international partners that sustainable development must be inclusive and equitable. By prioritizing local needs and ensuring that vulnerable communities are not left behind, this partnership aims to create a model for other countries facing similar challenges in their energy transitions.
With more than 4 billion euros invested over three decades, AFD is taking significant steps to support South Africa's fair energy transition. This investment not only aims to reduce carbon emissions but also seeks to empower local communities by creating new job opportunities and fostering sustainable economic growth through renewable energy initiatives. As global attention turns towards climate action, South Africa's efforts serve as a critical example of how collaborative partnerships can drive meaningful change in the pursuit of a greener future.