South Africa

South Africa is one of the leading economic powers in Africa. Yet the country continues to be marked by high levels of socioeconomic inequalities. AFD’s support has historically focused on the upliftment of disadvantaged populations. Since 2008, it has also been supporting infrastructure development and is scaling up its climate action.
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Cape Town minibus station (South Africa)
AFD and South Africa: A sustainable and innovative partnership
Cape Town minibus station (South Africa)

Toward a sustainable and balanced urban and territorial development

South Africa Meeting with an AFHCO housing tenant

Toward a sustainable and balanced urban and territorial development

AFD supports South Africa’ sustainable urban development policy, which aims to make cities and human settlements inclusive, safe, resilient and sustainable. AFD provides direct loans to metropolitan municipalities for infrastructure projects and to fund capital budgets to support development policies. It also uses financial intermediaries to support small and medium sized municipalities in their basic infrastructure investments.

South Africa’s largest cities have been tapping into AFD’s expertise in their effort to promote more carbon-efficient urban development and greater resilience to climate change. Through a technical cooperation agreement, AFD has facilitated peer-to-peer dialogue on climate resilience and adaptation between staff of the City of Paris and City of Johannesburg. In Cape Town, AFD has funded a study on risks assessment and adaptation solutions through the Cities and Climate Change in Africa programme, which aims at accelerating the implementation of infrastructure projects, while at the same time maximizing their climate co-benefits.

Speed up the energy transition

bio2watt, énergie, biogaz, vaches, Afrique du Sud

Speed up the energy transition

South Africa has shown great commitment to reducing carbon emissions by decreasing its dependence on coal and increasing energy generation from renewable sources by 2030. If these efforts are sustained, carbon emissions should stabilise between 2025 and 2030 and decline thereafter.

AFD is a long-term partner of ESKOM, South Africa’s national electricity provider, and has been instrumental in helping the country diversify its energy mix. In the Western Cape, AFD has co-financed the construction of a 100 MW wind farm, which represents ESKOM’s first foray into large scale wind energy. Going forward, AFD has recently issued a multi-tranche facility to finance ESKOM’s transmission development plan and ensure the integration of the renewable energy resources.  

Through its green finance label Sunref, AFD has helped small and medium enterprises (SMEs) access finance through major South African banks to kick-start or scale up their efficiency and renewable energy projects.

SMEs also benefit from technical assistance in the form of knowledge transfers and expertise for energy use management through AFD’s partner the South African Energy Development Institute (SANEDI).

Creating opportunities for all and reducing social inequalities

Johannesburg, Afrique du Sud, ville, jeunes

Creating opportunities for all and reducing social inequalities

AFD regards vocational training and access to decent employment, especially for previously disadvantaged youth, as key to unlock the economic potential of the country. Currently, more than half of young people aged 15-24 are unemployed in South Africa. 

AFD works with government, universities public and private training institutions to improve access to employment by supporting higher education and vocational training programmes. AFD is currently exploring the possibility of providing student loans and student accommodation, which will contribute to increasing access to quality education for previously disadvantaged populations.

AFD also remains committed to improve access to housing for previously disadvantaged populations. To this end, AFD has developed key partnerships with private property developers such as the Affordable Housing Company (AFHCO) and state-owned financing institutions such as the National Housing Finance Corporation (NHFC) and the Gauteng Partnership Fund (GPF).

2,5
billion euros of commitments since 2004
40
projects financed since 2004
360
MW of renewable energy financed since 2004

With a population of about 54 million and an annual income of nearly US $ 12,390 per capita, South Africa is one of the largest economies in the African continent. With a GDP of over US$ 320 billion at the end of 2015, South Africa is the second economy of sub-Saharan Africa after Nigeria.

South Africa has a rich and varied mineral wealth, a well-developed financial sector, efficient legal and communication sectors and modern infrastructure.  Despite the formal eradication of apartheid in the early 1990s and a much-celebrated transition to democracy in 1994, South Africa remains a land of stark economic inequalities that break along racial lines. In addition, the country has been experience slow economic growth and high unemployment and governance issues facing state-owned companies  

South Africa is amongst the world's most carbon-intensive economies due to its heavy reliance on coal for electricity generation and an energy-intensive industrial and mining sector. However, the country has shown great commitment to reducing carbon emissions by decreasing its dependence on coal and increasing energy generation from renewable sources by 2030. If these efforts are sustained, carbon emissions should stabilise between 2025 and 2030 and decline thereafter.

AFD has been active in South Africa since 1994, offering innovative financing solutions and technical assistance to support the South African government in its development policy. AFD works with government partners and local authorities to promote a low-carbon economy and reduce economic, social and territorial inequalities.

Around half of AFD’s projects are co-financed with partners – not just other development banks – but also research institutions, universities, NGOs, foundations, think tanks, development institutions, United Nations agencies and local and regional authorities. Co-financing helps to multiply the impact of our projects and attract other partners, therefore allowing us to be more ambitious.

The Johannesburg agency also covers AFD's activities in Angola, Botswana, Mozambique, Namibia, Zambia and Zimbabwe.

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