The Development Bank of Southern Africa (DBSA) and the New Development Bank (NDB) signed a loan agreement for greenhouse gas emissions reduction and energy sector development project.
Under the agreement, the NDB will provide a loan without a sovereign guarantee to the DBSA to an amount of up to $300 million.
The loan will be in the form of a two-step loan, which in turn will be on-lent to the DBSA’s identified subprojects, within particularly the wind, solar, and biomass energy sectors.
The loan agreement was signed by Xian Zhu, NDB VP & COO and Patrick Dlamini, DBSA CEO during the 4th Annual Meeting of the New Development Bank in Cape Town, South Africa.
The bank also signed another loan agreement with Eskom, to support renewable energy integration and transmission augmentation project.
The greenhouse gas emissions reduction and energy sector development project is designed to support renewable energy projects in South Africa and help the economy to shift to a more sustainable energy path through structural transformation of the energy sector with emerging renewable technologies.
Investments in renewable energy
The objective of the project is to facilitate investments in renewable energy that will contribute to the power generation mix and reduction in carbon dioxide (CO2) emissions in the country, in line with the government’s Integrated Resource Plan 2010 and its target of reducing greenhouse gas emissions as articulated in the National Development Plan 2030.
The project will bring significant developmental impacts through the subprojects, particularly related to environmental and social benefits from the reduction in CO2 emissions, increase in generation capacity from renewable energy sources, and increase in the efficiency of the energy sector in South Africa.
The project is also expected to contribute to unlocking private sector investment, and increasing the availability of long-term funds for projects in the energy sector in the country.