Reform-FöK to support the Just Energy Transition

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The aim of the project is to support the South African government in implementing comprehensive energy sector reforms. The reforms are based on South Africa's commitments under the Paris Climate Agreement and the National Determined Contributions (NDC) to reduce CO2 emissions. The project also contributes to the implementation of the world's first Just Energy Transition Partnership (JET-P) announced at COP26 by South Africa, France, Germany, Great Britain, the USA and the EU. To finance the project, the Republic of South Africa will be provided with a promotional loan in the form of a policy-based financing approach. This development policy instrument involves the negotiation of (sector) political reform programs that are initiated and implemented by the partner government on its own initiative. The policy-based financing approach is intended to support the implementation of reform measures that contribute to a socially acceptable and ecologically sustainable restructuring of the South African energy sector. The focus is on measures to reduce CO2 emissions, including the creation of sectoral emissions targets and the restructuring of energy generation capacities. By 2030, the share of fossil fuels in generation capacity is to be reduced to a maximum of 48% (cf. 2018: 79%) and at the same time the share of renewable energies is to be increased to at least 38% (cf. 2018: 11%) (installed capacity). This will make a significant contribution to achieving the planned CO2 emission savings, which, with an ambition level of a maximum of 350-420 million tonnes of CO2 -eq per year by 2030 according to the Climate Action Tracker, would essentially meet the requirements of the so-called 1.5 degree target from the Paris Climate Agreement if the lower end of the corridor is reached.