South Africa is currently negotiating loan guarantees with its international partners in its $9.3-billion Just Energy Transition Partnership (JETP) program for energy investment.

The International Partners Group (IPG) of South Africa’s climate pact includes the U.S., the EU, the UK, France, Germany, the Netherlands, and Denmark.

But the lack of loan guarantees has so far withheld the disbursement of much of the funds of the multi-billion-dollar partnership aimed at helping South Africa reduce its reliance on coal and cut carbon emissions.

“We are managing, in particular, issues with our international partners” around these loan guarantees, Joanne Yawitch, head of the project management unit for the partnership at the South African presidency, said on Friday.

“We are on the edge of seeing some of that finance flowing,” Yawitch added, as carried by Bloomberg.

At the end of last year, the African Development Bank Group approved a $1 billion guarantee program in collaboration with the UK Foreign Commonwealth and Development Office (FCDO), which will allow the Bank to increase its lending capacity in support of South Africa’s Just Energy Transition (JET). The program will help fund investments in transmission and grid-balancing storage, renewable energy generation, energy efficiency, rehabilitation of municipal electricity delivery, green hydrogen, and new electric vehicles.

South Africa needs a lot of investment in grid expansion and capacity to overcome current constraints and accommodate more renewables.

Earlier this year, Eskom, the state-owned utility of South Africa, said it is holding talks with the government on ways to attract public and private financing of the equivalent of $21 billion for a major expansion of the power grid to accommodate an expected rise in renewable energy.

Eskom has estimated that it needs $21 billion (390 billion South African rand) to fund its plan to build nearly 9,000 miles of new power lines over the next decade, which would be more than triple the miles of transmission lines it has installed in the past decade.

By Charles Kennedy for Oilprice.com

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