South Africa: EIB and FirstRand Bank boost renewable energy investments with € 400 million/ZAR 7.9 billion initiative

This article is published in association with European Investment Bank.

• The solar and wind projects to be supported will increase the reliable supply of clean and low-cost energy.
• The initiative will also contribute to job creation during the construction and operation of the renewable energy projects.
• The investment will increase energy generation by the private sector, while reducing carbon emissions.

Renewable energy projects developed by independent power producers in South Africa received a € 400 million (ZAR 7.9 billion) boost with today’s announcement of a joint initiative between the European Investment Bank (EIB) and FirstRand Bank Ltd. A € 200 million (ZAR 3.9 billion) loan from the EIB will be matched by FirstRand Bank to invest in renewable energy, in particular solar photovoltaic and wind energy, as well as energy-efficiency projects. The investments will aim to increase the supply of reliable, affordable, clean and sustainable energy in the country, reducing dependence on fossil fuels.

The investment is part of Global Gateway, Europe’s external strategy for clean and sustainable infrastructure, and complements the Just Energy Transition Partnership (JETP) to support South Africa’s decarbonisation and to foster new opportunities in the new green economy.

With an average of 2,500 hours of sunshine per year, South Africa is one of the top three locations in the world for solar photovoltaic energy generation. However, so far investment has not matched the country’s potential. Supporting private sector investment to diversify South Africa’s energy mix will make strides to increase energy security, reducing power cuts, as well as fighting climate change.

“The bank’s approach to helping its clients shift to renewable energy and enhance climate resilience supports South Africa’s efforts to address the country’s climate change and energy supply challenges,” said Bhulesh Singh, FirstRand Group Treasurer.

“As the EU’s climate bank, the EIB is committed to working with its partners to support a green transition,” said EIB Vice-President Ambroise Fayolle. “Companies have recognised the business opportunities in moving to clean energy technologies; EIB financing is there to back those investment needs.”

“Fighting climate change, moving towards net zero emissions and spurring green economic growth requires public and private actors to work hand in hand. This initiative from the European Investment Bank and FirstRand Bank shows the power to mobilise resources to achieve those objectives when public-private partnerships are created,” said Sandra Kramer, EU Ambassador to South Africa.

The initiative with FirstRand Bank was announced during a visit of EIB Vice-President Fayolle to South Africa to launch the EIB’s Regional Hub for Southern Africa and the Indian Ocean.

Background information

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.

EIB Global is the EIB Group’s specialised arm dedicated to increasing the impact of international partnerships and development finance. EIB Global is designed to foster strong, focused partnership within Team Europe, alongside fellow development finance institutions, and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices across the world. The EIB opened its first office in South Africa in 2005.

About Global Gateway

Global Gateway is the European strategy to boost smart, clean and secure links in digital, energy and transport sectors, and to strengthen health, education and research systems across the world. Through a ‘Team Europe approach’, Global Gateway brings together the EU, its Member States and their financial and development institutions to mobilise the private sector to leverage investments for a transformational impact. It aims to mobilise up to € 300 billion (ZAR 5.94 trillion) in investments. Global Gateway is fully aligned with the UN’s Agenda 2030 and its Sustainable Development Goals, as well as the Paris Agreement. The EIB is a key partner in Global Gateway. It aims to support € 100 billion (ZAR 1.98 trillion) of investment by the end of 2027, around one third of the overall target of this EU initiative. In South Africa, Global Gateway investments focus on the development of sustainable strategic value chains in renewable energy, including critical raw materials, transport and health.

About FirstRand Bank Ltd

FirstRand Bank Limited (FRB or the bank) is a wholly owned subsidiary of FirstRand Limited (FirstRand or the group), which is listed on the Johannesburg Stock Exchange (JSE) and Namibian Stock Exchange (NSX). The bank provides a comprehensive range of retail, commercial, corporate and investment banking services in South Africa and offers niche products in certain international markets. The bank has three major divisions which are separately branded: First National Bank (FNB), WesBank and Rand Merchant Bank (RMB).