The European Investment Bank said it\u2019s in talks to loan South Africa money to upgrade its port and freight-rail infrastructure as its first contribution to a decarbonisation pact known as the Just Energy Transition Partnership.<\/p>\n\n\n\n
The loan, the size of which the EIB didn\u2019t disclose, is part of its \u20ac1 billion (R20 billion) commitment to the JETP, it said in a response to queries on Thursday. <\/p>\n\n\n\n
The agreement to help South Africa transition away from the use of coal consists of $8.8 billion (R147 billion) in climate finance pledged by the European Union via the EIB, France, Germany, the US, the UK, the Netherlands and Denmark.<\/p>\n\n\n\n
\u201cThis potential investment would aim to support South Africa\u2019s ambitious decarbonization efforts under the JETP while boosting economic growth through more efficient and reliable freight transport,\u201d the EIB said.<\/p>\n\n\n\n
The loan talks come at a time when South African shipments of coal and iron ore, two of its biggest exports, are being constrained by an unreliable freight-rail system, and fruit destined for overseas markets is rotting in some of the world\u2019s most inefficient ports.<\/p>\n\n\n\n
EIB loans are made \u201cat a favourable rate\u201d and would possibly be complemented by grant finance from the European Commission, the bank said.<\/p>\n\n\n\n
South Africa\u2019s National Treasury and Transnet, its state logistics company, didn\u2019t respond to requests for comment.<\/p>\n\n\n\n
The JETP, which was agreed in 2021, is seen as a prototype for similar agreements between some of the world\u2019s richest nations and coal-dependent nations such as Indonesia and Vietnam.<\/p>\n\n\n\n
South Africa, which relies on coal for more than 80% of its power, is also aiming to boost its output of renewable energy, expand its transmission grid and develop electric-vehicle and green-hydrogen industries.<\/p>\n\n\n\n
In November and December, in agreements separate from the JETP, the EIB agreed to lend the state-owned Development Bank of Southern Africa \u20ac300 million (R6.1 million) so that it can finance private-sector renewable energy projects in South Africa.<\/p>\n\n\n\n