South Africa\u2019s National Treasury is in talks to secure loans from Germany and the UK under the terms of a climate pact the US walked away from last month. <\/p>\n\n\n\n
The Treasury said it\u2019s in talks to secure so-called policy loans from lenders including KfW, Germany\u2019s state development bank, and the African Development Bank, through which the UK is channeling its assistance by providing credit guarantees. It didn\u2019t give further details in a response to queries.<\/p>\n\n\n\n
The loans are evidence that countries that are part of the Just Energy Transition Partnership are pushing ahead with the program, even after the US cancelled plans to contribute $1 billion in loans and $48 million in grants. <\/p>\n\n\n\n
People familiar with the situation said the two loans could total close to $1 billion, asking not to be identified as a public statement hasn\u2019t been made.\u00a0<\/p>\n\n\n\n
\u201cWhile the withdrawal of the US is regrettable, the International Partners Group remains fully committed to supporting South Africa to deliver its just energy transition,\u201d the other countries and groups in the pact \u2014 Germany, France, UK, the European Union, Denmark and the Netherlands \u2014 said in a March 19 statement<\/a>. <\/p>\n\n\n\n The JETP, agreed in 2021, is designed to help South Africa, which has the most carbon-intensive economy of any nation with a population of more than 4 million people, cut its dependence on coal. <\/p>\n\n\n\n Similar programs have since been agreed between wealthy nations and Indonesia and Vietnam. The US has quit those programs as well.\u00a0<\/p>\n\n\n\n The KfW loan could be close to \u20ac500 million ($553 million) and would be used to help capacitate South Africa\u2019s recently formed national transmission company, three of the people said. <\/p>\n\n\n\n South Africa is planning to expand its grid to allow it to take on more renewable energy.\u00a0<\/p>\n\n\n\n KfW declined to comment. The National Transmission Company South Africa and its holding company Eskom Holdings SOC Ltd. didn\u2019t respond to a request for comment. <\/p>\n\n\n\n The UK loan channeled through the AfDB could exceed $400 million and would be targeted at helping municipalities in South Africa\u2019s coal belt with water and other projects, one of the people said. <\/p>\n\n\n\n The UK\u2019s Foreign, Commonwealth and Development Office declined to comment and the AfDB didn\u2019t respond to a query.<\/p>\n\n\n\n Both KfW and France\u2019s Agence Francaise de Developpement have already made loans to the National Treasury under the JETP program directed toward specific objectives. <\/p>\n\n\n\n