The World Bank has sanctioned a development policy loan worth $1 billion with the aim of bolstering South Africa’s energy sector, advancing its low-carbon transition, and supporting the ongoing electricity market reforms in the country. The funding, structured as a development policy loan, will be channelled to the National Treasury. This funding marks the third policy loan since the establishment of the Just Energy Transition Partnership with several developed countries.
Notable contributions from the French and German development banks, Agence française de développement and Kreditanstalt für Wiederaufbau (KfW), respectively, in November 2022, exemplify the collaborative international effort to bolster South Africa’s energy reforms. The loan, a joint endeavour involving the World Bank, the African Development Bank, KfW, and the governments of Canada and South Africa, aligns with the nation’s development priorities outlined in the Energy Action Plan. This plan addresses critical issues such as load-shedding and the energy transition, emphasising a shift towards sustainable energy practices. The loan’s objectives encompass the restructuring of the power sector through Eskom’s unbundling and the redirection of resources towards vital investments in transmission and plant maintenance.
In December 2022, the World Bank and partners, including Singapore, launched a worldwide tracking system in an effort to clear up the opaque carbon credit market and assist developing countries in promptly and more effectively obtaining much-needed climate finance. In order to help polluters reach net-zero emissions and slow global warming, carbon credits are sold to them to offset their emissions.