With more than 4 bn EUR invested in 30 years, AFD further commits to a fair energy transition in South Africa

To mark the 30th anniversary of the partnership between AFD and South Africa, on November 7 and 8 at the Mandela Foundation, Rémy Rioux, Chief Executive Officer of AFD, visited Johannesburg with French Senator Sophie Briante-Guillemont, (an AFD board member). Since 1994, AFD has supported South Africa’s national priorities through a wide range of financing solutions and technical cooperation tools. To date, AFD Group has invested more than €4 billion in sustainable development projects in sectors including energy, water and sanitation, transportation, health, biodiversity, urban development, social infrastructure, creative and cultural industries, and sports.

For example, over the past thirty years AFD Group has financed the following exemplary projects: Eskom's only wind farm, Sere Wind Farm; the structuring and issuance of DBSA's first Green Bonds; and the project to revitalise Johannesburg's inner city through the DiverCity Affordable Housing Programme.

Towards a fair and inclusive energy transition

Today, South Africa remains one of the most carbon-intensive economies in the world, making it particularly vulnerable to the social risks associated with energy transition. Over the last five years, President Cyril Ramaphosa has championed the JET as a central pillar of South Africa’s policy for transitioning towards a low-carbon economy and fostering sustainable, inclusive economic growth.

To support this ambition, AFD is implementing a new strategy for a Just Transition in collaboration with its South African partners – including the Presidency, National Treasury, ministries, local governments, public enterprises, private sector stakeholders, civil society organizations, academia, and development banks. AFD is committed to expanding its operational activities to support the “just” aspects of the JET, for its potential to generate local job creation, reduce poverty and redress socio-economic inequalities and injustices, longstanding legacies of apartheid.

Three New Financial Commitments

This visit facilitated the signing of key agreements to support energy transition and inclusive development:

• €400 million Public Policy Loan: This innovative policy-based financing, the largest ever on AFD's balance sheet, was developed in close collaboration with the Presidential Climate Commission and National Treasury to support the just dimensions of the JET, maximizing the social outcomes of the energy transition for local communities. This loan builds on the €300 million public policy loan provided in 2022, bringing France’s total contribution to the JETP to €700 million out of the €1 billion pledged at COP26 in Glasgow.
• €200,000 for a New DLAB in Mpumalanga: This grant supports the creation of a Development Laboratory (DLAB) in Mpumalanga, South Africa’s coal heartland. Launched by DBSA and AFD in 2015, the DLAB model revitalizes territories and tackles the spatial inequalities inherited from apartheid, by supporting communities through training and learning future skills ready for use.
• €6.5 million for an Eskom Hydropower Project: Implemented on behalf of the European Union through the Infrastructure Investment Programme for South Africa (IIPSA), this financing supports the preparation of a 1.5 GW pumped water storage project in Limpopo Province.

AFD has provided nearly €2 billion in sustainable investments in South Africa between 2020 and 2024, including a €126 million loan signed in July to support the City of Johannesburg’s sustainable investments in water and energy sectors. This marks more than a fourfold increase over AFD’s average annual commitments for the previous 25 years.

Rémy Rioux, Chief Executive Officer of AFD, said: “As we celebrate 30 years of partnership with South Africa, AFD Group is delighted to be working alongside the country to play an active role in realizing its aspirations. We are proud to make new commitments, marking decisive steps in the partnership between France and South Africa for a fair and inclusive energy transition. The next Finance in Common Summit, in South Africa, will be crucial in contributing to the ongoing reforms of the international financial architecture and lay the groundwork for a new development and climate finance framework”.

Toward a Finance in Common Summit in Cape Town, February 26-28, 2025

Just days ahead of COP29 in Baku and the start of South Africa’s G20 presidency, these initiatives are part of an international framework that sets a precedent for other countries – both in the Global North and South, and particularly in Africa – engaged in Just Energy Transition processes.

During his visit, Rémy Rioux also worked to advance the Finance in Common (FiCS) initiative, which he has chaired since 2020. The next summit, co-organized by the Development Bank of Southern Africa (DBSA) and the Asian Infrastructure Investment Bank (AIIB), and supported by AFD, will bring together over 530 public development banks from around the world in Cape Town in February 2025, coinciding with the inaugural meeting of finance ministers and central bank governors under South Africa’s G20 presidency. This significant meeting will contribute to ongoing reforms of the international financial architecture and lay the groundwork for a new development and climate finance framework at the upcoming FfD4 conference in Seville in July 2025.

Origins of the AFD-South Africa Partnership

In July 1994, President François Mitterrand, the first head of state to visit South Africa after Nelson Mandela’s election, made the decision to establish an AFD office in South Africa. Entrusted to Ambassador Georges Serre, who joined the celebration, this office was tasked with supporting the young democracy in its development journey, striving for an inclusive and prosperous society.

This celebration, held at the Mandela Foundation in tribute to South Africa’s path, offered a unique opportunity to reflect on the country’s key milestones over the last three decades and on AFD’s sustained commitment to South Africa’s progress. The discussions also looked toward the future, particularly AFD’s role in fostering a Just Energy Transition (JET) towards low-carbon, inclusive development.