The Government of the Republic of South Africa and the European Investment Bank (EIB) today signed a Declaration of Intent regarding continued EIB financing support to South Africa during the period 2007-2013.
Since 1995, the EIB has channelled EUR 1.5 billion (ZAR 14.6 billion) into the financing of productive investment inSouth Africaunder the Framework for co-operation between South Africa and the European Union.
The main areas of co-operation during this period were municipal infrastructure, support to small and medium-scale investments, as well as electric power, water and road infrastructure. Examples of projects financed include the first toll road in the country and the Berg water project which concerned the construction of a storage dam to help to satisfy water demand in and around Cape Town. Over 50% of all disbursements were made in South African rand (ZAR).
In December 2006, the European Council agreed a new EUR 900 million (ZAR 8.7 billion) mandate for EIB in South Africa for the period 2007 - 2013. In line with the new mandate, and in co-operation with the South African authorities, public agencies, private enterprise and the financial sector, the Bank will focus on investment in infrastructure projects of public interest (including municipal infrastructure, power and water supply) and private sector support, including SMEs.
The Joint Country Strategy Paper for South Africa defines the reduction of poverty and inequality as the overriding objective of the development co-operation between the European Union and South Africa for the period 2007 – 2013. In addition, the creation of employment is a focal sector of the Multi-Annual Indicative Programme for the same period. EIB financing in South Africa in the context of the new mandate will actively support these objectives.
Concretely, financing proposals will concern public and private sector projects and programmes in the sectors of energy, water and sewerage, transport and telecommunications, affordable housing, municipal and provincial infrastructure, industry (including agro-industry), tourism and mining. Assistance to small and medium-scale investments will be provided through approved financial intermediaries.
The EIB agreed to provide a EUR 40m loan to FirstRand Bank to promote energy efficiency and renewable energy projects across South Africa. Potential projects currently under consideration by RMB include the development, construction and operation of two 3 MW mini-hydro power facilities at existing dams in rural areas of South Africa. These are estimated to reduce CO2 emissions by a total of 30,000 tons a year.