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French Embassy in SA: AFD/SANEDI/SECO agreement to further SA's green transition

LGV Plants CEO Geert van Geest, French Embassy CCCA Frank Marchetti and French Ambassador to SA Elisabeth Barbier
Photo by French Embassy in SA
LGV Plants CEO Geert van Geest, French Embassy CCCA Frank Marchetti and French Ambassador to SA Elisabeth Barbier

27th May 2016

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SECO, the State Secretariat for Economic Affairs of Switzerland, and AFD, the French Agency for Development, signed this Thursday 26th May an agreement to finance a technical assistance program to assist banks in financing small scale renewable energy and energy efficiency projects in South Africa. This technical assistance totalizing an amount of 3M€ financed by SECO and managed by AFD will enable local finance institutions to strengthen their capacities in clean energy finance. It will also provide expertise for project developers to develop and improve their green energy projects.
The technical assistance is complementary to a contemplated credit facility of 120M€ financed by AFD to the benefit of partner banks and institutions. The facility provides long-term low-interest loans adapted to renewable energy and energy efficiency projects which face difficulties in accessing funding.

The potential partners, the Industrial Development Corporation (IDC) and Nedbank, will be in charge of lending directly to the companies 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). The technical assistance program will be hosted by the South African National Energy Development Institute (SANEDI). This institution, in charge of energy research and promotion of green energy in South Africa, signed an agreement with AFD to implement the technical assistance. It will support the partners in identifying and assessing green projects. The technical assistance will also assist the banks and SANEDI with capacity building for renewable energy projects for a period of three years.

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For a first collaboration between SECO and AFD in South Africa, SECO has delegated this grant to AFD for a period of 5 years. Both AFD and SECO are strongly committed in promoting renewable energy initiatives in the private sector as a key element to support green transition in South Africa. The program builds upon a successful first program implemented by AFD, SANEDI and 3 partners 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. To experience the success of the first program, the signing ceremony was followed by the visit of LVG Plants in Krugersdorp - the largest horticultural facility in South Africa - that benefited from the phase 1. The project aims to switch LVG’s green house from coal-based heating to solar thermal energy and, through the use of solar water heating panels and a hot storage tank, LVG Plants have reduced their coal consumption by 80%.

The facility has 700 000 square meters of solar panels - the biggest in the Southern Hemisphere. Through this new program, AFD, SECO, SANEDI and the two potential partner institutions confirmed their commitment to support South Africa’s efforts towards a green transition. The program will enable the financing of a number of projects, therefore supporting the development of green industries and promoting access to finance for small and medium companies in South Africa.

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AFD
Agence Française de Développement (AFD), a public financial institution that implements the policy defined by the French Government, works to combat poverty and promote sustainable development. AFD operates on four continents via a network of 75 offices and finances and supports projects that improve living conditions for populations, boost economic growth and protect the planet. In 2015, AFD earmarked EUR 8.3bn to finance projects in developing countries and for overseas France.

SECO
The Swiss State Secretariat for Economic Affairs’ (SECO) Economic Cooperation and Development Division is responsible for the planning and implementation of economic cooperation and development activities in 17 middle income countries, including South Africa. SECO has been present in South Africa through an economic cooperation and development program since 2009, and is currently in the approval process for a further four-year economic cooperation program for the period 2017-2020. Based on its core competencies and so as to optimize existing resources, SECO focuses on five priority themes: strengthening of economic and financial policy, improvement of urban infrastructure and utilities, support to the private sector and entrepreneurship, promotion of sustainable trade, and fostering of climate-friendly growth.

The overall objective is to promote economically, environmentally and socially sustainable growth that will create new jobs, encourage higher productivity and contribute to reducing poverty and inequality. This is achieved by integrating partner countries into the global economy and strengthening the competitive ability of their domestic economies.

SANEDI
SANEDI is a national public entity established under the Energy Act, 2008. Its main functions are energy research and technology development, and energy efficiency measures implementation. SANEDI strives to bridge the gap between R&D and demonstration & implementation. SANEDI works with state, donor and private sector funding. The institution has been involved in SUNREF program since its beginning in 2012.

 

Issued by French Embassy in South Africa

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