South Africa launches its Energy Transition

At COP 26, the EU and some European nations granted a loan of $8.5 billion to South Africa. The ministers will meet in the coming days to discuss an investment plan, aimed at accelerating the country's energy transition, which depends mainly on coal.

Share:

South Africa intends to accelerate its energy transition. To do so, it can count on the financial support of Europe. The EU, the UK, Germany and France have pledged $8.5 billion towards this goal. It is then a question of helping South Africa to do without coal.

In fact, South Africa is the 12th largest carbon emitter in the world. In 2019, the country released about 430 Mt of CO2. This is more than Mexico or Brazil.

South Africa working on an investment plan

The country’s ministers will meet in the coming days. They intend to discuss an investment plan to accelerate South Africa’s energy transition. In fact, their ambition is to finalize it before COP 27. The latter will be held in Egypt, starting on October 31.

However, South Africa still does not have a plan to present to donors. In addition, the terms of the funds have not been agreed upon. Moreover, it is important to note that 80% of these are not grants, but loans.

Barbara Creecy, Minister of the Environment, explains:

“I think we underestimated the complexity of the situation when you have four partners and each of them has their own budget issues and their own development agencies. There was this chicken and egg situation where we would say ‘give us a chapter and verse on the agreement,’ and they would say ‘let’s look at the investment plans.'”

So, to speed up the process, South Africa is working on the investment plan while discussing the conditions.

She adds:

“The investment plan is now … ready for the minister’s review. We will have that meeting this week or next. We always try to meet that deadline [COP27].”

Obstacles

Indeed, the country faces many obstacles. These must be overcome in order to truly accelerate South Africa’s energy transition and meet the country’s self-imposed deadlines.

An insufficient amount

South Africa wants to decarbonize Eskom, the national electricity company, which has a large debt. It is mainly based on coal, which provides 80% of its production. Thus, the country wishes to accelerate its transition to renewable energy.

Secondly, the government aims to make the country a leader in the manufacture of electric vehicles and also in hydrogen.

However, the $8.5 million envelope seems insufficient. B. Creecy explained that these grants will be used for non-revenue generating items such as feasibility studies. She states:

“For South Africa to go from where it is today to net zero by 2050, we are talking trillions, not billions of rands.”

A political opposition

In addition to the question of the sum, South Africa is the scene of strong opposition within Congress. For example, union leaders are concerned that the energy transition will negatively impact jobs. The latter estimate that it could lead to the loss of 90,000 coal mining jobs.

In addition, Gwede Mantashe, Minister of Energy, is himself pro-coal. Thus, he multiplies skeptical remarks about renewable energies. He also points to a certain hypocrisy of European nations that, in the face of the energy crisis, are returning to coal.

B. Creecy recalls the criticism directed at South Africa during COP 26. The country has been criticized for citing national circumstances for the use of coal.

She then comments:

“Europe has lost some of its moral authority. The same countries that criticized us are now themselves invoking national circumstances [pour brûler plus de charbon]. That’s a bit hypocritical, isn’t it?”

Nearly USD92bn will be invested by major American and international groups in new data centres and energy infrastructure, responding to the surge in electricity demand linked to the rise of artificial intelligence.
Nouakchott has endured lengthy power interruptions for several weeks, highlighting the financial and technical limits of the Mauritanian Electricity Company as Mauritania aims to widen access and green its mix by 2030.
Between 2015 and 2024, four multilateral climate funds committed nearly eight bn USD to clean energy, attracting private capital through concessional terms while Africa and Asia absorbed more than half of the volume.
The Global Energy Policies Hub shows that strategic reserves, gas obligations, cybersecurity and critical-mineral policies are expanding rapidly, lifting oil coverage to 98 % of world imports.
According to a report by Ember, the Chinese government’s appliance trade-in campaign could double residential air-conditioner efficiency gains in 2025 and trim up to USD943mn from household electricity spending this year.
Washington is examining sectoral taxes on polysilicon and drones, two supply chains dominated by China, after triggering Section 232 to measure industrial dependency risks.
The 2025-2034 development plan presented by Terna includes strengthening Sicily’s grid, new interconnections, and major projects to support the region’s growing renewable energy capacity.
Terna and NPC Ukrenergo have concluded a three-year partnership in Rome aimed at strengthening the integration of the Ukrainian grid into the pan-European system, with an in-depth exchange of technological and regulatory expertise.
GE Vernova has secured a major contract to modernise the Kühmoos substation in Germany, enhancing grid reliability and integration capacity for power flows between Germany, France and Switzerland.
The National Energy System Operator forecasts electricity demand to rise to 785 TWh by 2050, underlining the need to modernise grids and integrate more clean energy to support the UK’s energy transition.
Terna has signed a guarantee agreement with SACE and the European Investment Bank to finance the Adriatic Link project, totalling approximately €1bn ($1.08bn) and validated as a major transaction under Italian regulations.
India unveils a series of reforms on oil and gas contracts, introducing a fiscal stability clause to enhance the sector’s attractiveness for foreign companies and boost its growth ambitions in upstream energy.
The European Commission is launching a special fund of EUR2.3bn ($2.5bn) to boost Ukraine’s reconstruction and attract private capital to the energy and infrastructure sectors.
Asia dominated global new renewable energy capacity in 2024 with 71% of installations, while Africa recorded limited growth of only 7.2%, according to the latest annual report from IRENA.
US President Donald Trump's One Big Beautiful Bill Act dramatically changes energy investment rules, imposing restrictions on renewables while favouring hydrocarbons, according to a recent report by consultancy firm Wood Mackenzie.
On July 8, 2025, the Senate validated the Gremillet bill, aimed at structuring France's energy transition with clear objectives for nuclear power, renewable energies, and energy renovation.
Brazil, Mexico, Argentina, Colombia, Chile, and Peru significantly increase renewable electricity production, reaching nearly 70% of the regional electricity mix, according to a recent Wood Mackenzie study on Latin America's energy sector.
The Canadian government announces an investment of more than $40mn to fund 13 energy projects led by Indigenous communities across the country, aiming to improve energy efficiency and increase local renewable energy use.
The German Ministry of Economy plans to significantly expand aid aimed at reducing industrial electricity costs, increasing eligible companies from 350 to 2,200, at an estimated cost of €4bn ($4.7bn).
A major electricity blackout paralyzed large parts of the Czech Republic, interrupting transport and essential networks, raising immediate economic concerns, and highlighting the vulnerability of energy infrastructures to unforeseen technical incidents.