The World Bank has announced its support for the South African Government’s efforts to promote long-term energy security and a low carbon energy transition
As a demonstration of this, the board of the bank has committed a US$1bn development policy loan to endorse the response to the country’s energy crisis and its energy transition efforts.
The operation will facilitate the restructuring of the power sector in the country by unbundling Eskom, the country’s power utility, while also improving its efficiency and will support the opening of the power market. It will also support a low carbon transition by encouraging private investment into renewable energy and strengthening carbon pricing instruments.
“This operation comes at a crucial time for South Africa as it will provide much needed fiscal and technical support, enabling us to pursue our policy priorities in the energy sector including easing the electricity crisis in the long term, stimulating private sector engagement and creating jobs in the renewables space,” remarked Mmakgoshi Lekhethe, deputy-director general: asset and liability management, of the National Treasury of South Africa.
“We are pleased to support South Africa’s government, which has taken decisive reforms to address the challenges posed by the energy crisis. These reforms will benefit the people of South Africa—particularly the most vulnerable households,—the economy, the environment, and advance the energy transition,” says Marie Francoise Marie-Nelly, World Bank country director for South Africa.
The World Bank indicated that the operation will also contribute to gradual reductions in water and air pollution due to the reduced reliance on coal. African authorities will also receive technical assistance to identify future reforms necessary to manage the social costs associated with the decommissioning of coal-fired power.
