Posted by: Anouk Verheijen, Regional Representative and Senior Consultant, Sustainable Business Practices
As a country with high-intensity energy usage, South Africa is also a major emitter of greenhouse gases. At the same time, the country has been slow to adopt renewables into the energy mix and to reduce energy consumption through energy efficiency improvements. To help tackle these issues, Enclude is currently managing a technical assistance facility and €120 million green credit line from the French Development Agency (AFD) for small scale renewable energy and energy efficiency projects.
The AFD credit line is a concessional loan facility made available to three banks, namely ABSA, IDC, and Nedbank. Using a demand-driven approach, Enclude assists partner banks in building capacity in renewable energy and energy efficiency financing. Services provided under this facility range from designing project finance models for biogas projects to providing on-the job assistance to credit officers in assessing green loan applications.
The technical facility has been instrumental in building a pipeline of projects for the participating banks. More than 90% of the funds available through the credit facility have been committed to over 115 geographically and technologically diverse projects. This has resulted in 51 Megawatts of renewable energy capacity installed and over 300,000 tons reduction of CO2 emissions. Due to the success of this program, AFD is now intending to roll out a second green credit line in South Africa.