SANEDI (South African National Energy Development Institute) and the AFD (the French Development Agency) signed an agreement on the 26th of May 2016, to extend and implement the Technical Assistance Facility to the SUNREF 2 Green Credit Facility. The event was attended by the Ambassadors of both France and Switzerland to South Africa. This technical assistance is complementary to a credit facility financed by AFD with partner banks and institutions. This facility provides long-term low-interest loans adapted to renewable energy and energy efficiency projects which face difficulties in accessing funding.
The partners, the IDC and Nedbank, will be in charge of lending directly to the sponsors according to criteria such as the size of the project and the environmental impact of the projects (CO₂ reduction, production of green energy, energy savings). This technical assistance program will be hosted by SANEDI as the institution is responsible for energy research and the promotion of green energy in South Africa. It will support the partners in identifying and assessing green projects. In addition, the technical assistance will also assist the banks and SANEDI in capacity building in the renewable energy sector for a period of three years.
SECO, the State Secretariat for Economic Affairs in Switzerland, and AFD at the same time signed an agreement to finance the technical assistance program, totaling an amount of €3 million sponsored by the SECO and managed by AFD will enable banks to strengthen their capacities in clean energy finance. It will also provide expertise for project developers to develop and improve their green energy projects. For the first collaboration of its kind between both institutions in South Africa, SECO has delegated this grant to AFD for a 5-year period. Both AFD and SECO believe in the importance of promoting renewable energy initiatives in the private sector as a key element to support green transition in South Africa.
This program builds upon a successful initial program implemented by AFD, SANEDI and 3 partner banks between 2012 and 2015 that allowed for the financing of 120 small-scale clean energy projects, resulting in CO₂ savings of 370 000 tons per year.
Through this new program, AFD, SECO, SANEDI and the partner banks confirm their commitment to support the country’s efforts towards a green transition. It is hoped that this program will enable the financing of a higher number of projects, therefore supporting the development of green industries and access to finance for small and medium companies in South Africa.