(Ecofin Agency) – Financing includes a mix of instruments, including grants, low-interest loans, project risk coverage by insurance companies and equity investments.
Spain will mobilize an endowment of 2.1 billion euros (2.3 billion dollars) to finance projects in the areas of energy and water transition in South Africa, it said. Bloomberg this Thursday, April 6, citing a Spanish diplomat.
» This financing includes grants of €15 million for feasibility studies, while the rest of the funds will be injected in the form of loans at rates that represent around half the cost of commercial loans, project risk insurance and investments of capital. “, detailed the Spanish ambassador in South Africa, Raimundo Robredo Rubio.
The equity investments will be made through partnerships between Spanish development finance institution COFIDES and its South African counterpart, the Industrial Development Corporation (IDC).
However, the 30% share must be attributed to Spanish companies.
» Spanish participation is required. There must be a return on investment for the taxpayer ”, explained Mr. Robredo Rubio, indicating that the projects refer, among others, to the fields of electric batteries, green hydrogen and electric vehicles.
The Spanish initiative is in line with the objectives of the “Just Energy Transition Partnership – JETP” concluded in November 2021, during the 26th United Nations Conference on Climate Change, between South Africa and financial partners such as France, Germany, the United States , the United Kingdom and the European Union.
This 8.5 billion dollar programme, in which Spain does not participate, is presented as a pioneering example of how rich countries can help developing economies to free themselves from their dependence on coal.
Also read:
03/04/2023 – South Africa: Towards new German funding for a just energy transition plan
8/11/2022 – South Africa: Approval of US$8.5 billion investment plan for a just energy transition
05/10/2022 – South Africa unveiled a new plan to raise the $8.5 billion pledged to support its transition
