The European Investment Bank (EIB) has approved another €100-million (R1.98-billion) loan in support of the Development Bank of Southern Africa’s (DBSA’s) Embedded Generation Investment Programme, which is supporting the development of private solar PV and wind projects in South Africa.

The funding will be matched by the DBSA and is additional to the first €400-million (R7.9-billion) matching loan approved by both development finance institutions in 2022, increasing overall funding for the upscaling of small and medium-sized renewable-energy projects to €600-million (R11.9-billion).

The independent power producer projects supported by the scheme are expected to have a combined capacity of 384 MW.

The financing is described as concessional, although no details were provided. It forms part of the EU’s Global Gateway strategy for clean and sustainable infrastructure, and is additional to the bloc’s €1-billion (R19.7-billion) Just Energy Transition Partnership commitment to support South Africa’s decarbonisation efforts.

EIB VP Ambroise Fayolle confirmed the new loan at a signing ceremony held at the DBSA, having earlier presided over the opening of the bank’s Regional Hub for Southern Africa and the Indian Ocean, located at new premises in the Menlyn Maine precinct of Pretoria.

Fayolle, who announced new loans worth €300-million (R5.9-billion) during his visit, said the regional hub would strengthen the EIB’s presence in the region, where he said the need and opportunity for green-transition funding was great.

The hub’s team comprises investment and policy specialists – backed by economists, engineers and other experts at the EIB’s headquarters in Luxembourg – who will support investments in South Africa and across 13 more countries in Southern Africa and the Indian Ocean.

To date, the EIB has invested €8.3-billion (R164-billion) in the region.

The Pretoria office joins three other regional hubs on the continent, with the others located in Nairobi, Abidjan and Cairo.

EU ambassador to South Africa Sandra Kramer said she was delighted by the expansion and consolidation of the EIB’s footprint in South Africa, arguing that it showed the strength of the close partnership between the EU and the Southern Africa region.

Meanwhile, DBSA CEO Boitumelo Mosako described the new EIB loan as an exciting step forward as the bank moved to increase its financial support for renewable energy.

“With funded projects now coming online and contributing to the energy grid, we are proud to play a role in driving sustainable growth and energy resilience for South Africa,” Mosako said.