A EUR500 million loan agreement will help South Africa build an investment-ready environment in the renewable energy sector and advance the Just Energy Transition.

The loan, comprising market funds, was announced by German state-owned development bank KfW during a visit to South Africa in July by Germany’s Minister for Economic Co-operation and Development, Reem Alabali Radovan, reports ESI-Africa

Germany is expected to benefit from the deal as well.

 ‘German businesses and developers are already investing in the expansion of solar power, and South African companies are drawing on German materials, machinery and expertise. As a result, our energy partnership with South Africa will pay off many times over,’  said Radovan.

The loan will span 13 years, with a three-year grace period, and accumulate interest at 4.31% a year, according to Engineering News.

It is part of South Africa’s third Development Policy Operation, whose participants included the World Bank, the AfDB and the Opec Fund. The loan is linked to Germany’s pledge at COP26 to support South Africa’s Just Energy Transition Partnership.

5 August 2025
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