South Africa has received a $1.5 billion loan from the World Bank to accelerate energy reforms and infrastructure upgrades, as the country battles chronic power shortages that have stifled economic growth for over a decade.
The funding will support the addition of 3,500 MW of renewable energy capacity and 200 km of new transmission lines by 2027, while also backing reforms to modernize Transnet, the struggling state-owned ports and rail operator.
Finance Minister Enoch Godongwana called the loan crucial for advancing structural changes needed to revive South Africa’s economy, where unemployment hovers near 33%.
Since 2008, Eskom’s failing coal plants and unreliable grid have led to relentless blackouts—sometimes lasting 12 hours a day—slashing the country’s GDP potential by 20%, according to the Public Investment Corporation.
The World Bank’s latest loan follows a $1 billion energy sector injection in 2023, signaling growing international support for South Africa’s shift toward sustainable power.
While the funds aim to attract private investment and ease energy shortages, critics warn that reforms must deliver tangible improvements to avoid deepening debt without solving the crisis. As South Africa races to stabilize its electricity supply, the world watches whether this financial boost can finally power a recovery.
Add a Comment