By: Business tech

The UK is considering extending a $1 billion debt guarantee intended to support South Africa's green energy transition, as the existing guarantee is set to expire at the end of the year without having been utilized. The guarantee was approved in late 2023 as part of South Africa's broader $8.3 billion Just Energy Transition Partnership (JETP), an international climate-finance pact aimed at helping the country reduce its dependence on coal. The UK's Foreign, Commonwealth & Development Office confirmed it is in discussions to explore options to maintain its commitment beyond the expiry date.

The potential extension is relevant as South Africa negotiates a $400 million loan from the African Development Bank (AfDB) for municipal energy and water infrastructure in the coal-intensive Mpumalanga province. According to South Africa's National Treasury, this loan would fund projects to reduce utility losses and encourage private-sector participation through performance-based contracts. While Germany and France have disbursed funds under the JETP, and grants have been issued, the overall program's implementation has been slow, partly due to a shortage of suitable projects. The US withdrew from the partnership earlier in the year following the change in administration.