/ 22 November 2022

DBSA and EIB finance renewable energy projects in SA

Dbsa Eib
CEO Patrick Dlamini of the DBSA and Vice-President Ambroise Fayolle of the EIB formally agree at COP27 to EIB financing in South Africa

It’s the largest ever EIB investment for local private sector green energy programmes

Vice-President Ambroise Fayolle of the European Investment Bank (EIB) and CEO Patrick Dlamini of the Development Bank of Southern Africa (DBSA) formally agreed on 11 November at COP27, Sharm El-Sheikh, Egypt, to EIB financing in South Africa that will back a new targeted financing programme to unlock €400 million for private sector renewable energy investment across South Africa.

The €400 million initiative (7.2 billion ZAR equivalent) will be backed by €200 million from the EIB and provide financing for a range of new renewable energy projects across South Africa.

The scheme will help to increase clean energy power generation and contribute to DBSA’s Embedded Generation Investment Programme (EGIP), which is co-financed by the Green Climate Fund. The new initiative is expected to generate an additional 1200MW of generating capacity and avoid 3.6 million tonnes of CO2 emissions once all the supported projects are operational.

The projects it will finance are expected to create hundreds of new jobs during construction and operation, and support local companies.

Dlamini commented: “The DBSA has a clear goal to increase investment in renewable energy and improve energy security, not only in South Africa but across the African continent. South Africa, like many African countries, is already suffering [from] the effects of climate change. This new investment from the EIB in our Embedded Generation Investment Programme is an important contribution to South Africa’s resilient and sustainable growth.”

Fayolle added: “As the EU Climate Bank, the EIB is committed to supporting South Africa’s efforts to decarbonise and today’s agreement of the largest ever EIB investment in South Africa follows past support for renewable energy and climate adaptation projects across the country. EIB Global is pleased to build on three decades of partnership with DBSA to boost renewable energy generation which will contribute to energy security and a just transition in South Africa. 

“The EIB is stepping up its efforts to support green energy projects globally, with a special focus on Africa and economies dependent on carbon-intensive activities that are vulnerable to the impacts of climate change.”

EGIP

DBSA’s Embedded Generation Investment Programme (EGIP) supports the development and upscaling of solar photovoltaic and wind renewable energy embedded generation projects, developed by independent power producers operating in South Africa. Embedded generation is the production of electricity from smaller-scale power stations and is usually defined as projects that are planned for their own use. EGIP offers a credit support mechanism through the provision of risk capital.

Watch the DBSA and EIB signing ceremony at the EIB-Benelux Pavilion at COP27 here:

Cheaper solar, onshore wind and energy efficiency

The financing will be available for renewable energy projects — solar photovoltaic and onshore wind energy generation — and potentially to energy-efficiency projects promoted by the private sector in South Africa. These projects are expected to provide a reliable source of energy for South Africans at a lower cost than fossil fuel alternatives. The EIB facility complements the Just Energy Transition Partnership with South Africa, which focuses on support to the public sector.

EIB-DBSA partnership

This new operation builds on a long-standing and successful partnership between EIB and DBSA, which goes back to 1995, when the EIB first started working in South Africa. Since then, the EIB and DBSA have worked together on 11 projects, including a climate action facility that is currently being implemented, and supporting municipal infrastructure in areas such as water, sanitation and education.

About the DBSA

The Development Bank of Southern Africa is a leading Development Finance Institution (DFI), wholly owned by the government of South Africa. Established in 1983, the DBSA is mandated to promote economic growth and regional integration by mobilising financial and other resources from national and international private and public sectors for sustainable development projects and programmes in South Africa, SADC, and the wider African continent.

For more information visit www.dbsa.org

Email: [email protected]

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About the EIB 

The European Investment Bank is the long-term lending institution of the European Union and is owned by the EU Member States. The EIB Group has adopted a Climate Bank Roadmap to deliver on its ambitious agenda to support €1 trillion of climate action and environmental sustainability investments in the decade to 2030, and to deliver more than 50% of EIB finance for climate action and environmental sustainability by 2025. As part of the roadmap, all new EIB Group operations have been aligned with the goals and principles of the Paris Agreement since the start of 2021.

EIB Global is the EIB Group’s new specialised arm dedicated to increasing the impact of international partnerships and development finance. EIB Global is designed to foster strong, focused partnerships within Team Europe, alongside fellow development finance institutions and civil society. EIB Global brings the Group closer to local people, companies and institutions through its offices across the world