The New Development Bank (NDB) has become a player in South Africa’s transition towards a green and sustainable economy. Its investments in green projects bring multifaceted benefits, aligning closely with the country’s national sustainability goals and fostering long-term environmental and economic growth.
The 9th Annual Meeting of the New Development Bank (NDB) will be held in Cape Town from August 29 to 31.
The NDB’s investments in renewable energy projects have significantly contributed to diversifying South Africa’s energy mix, reducing reliance on coal, and enhancing energy security.
The NDB’s $180 million loan for the Renewable Energy Integration and Transmission Augmentation Project is helping connect 670 MW of renewable energy to the national grid.
This initiative not only strengthens energy security, but also encourages economic growth by creating jobs in the green economy.
The Greenhouse Gas Emissions Reduction and Energy Sector Development Project, another NDB-funded initiative, is expected to generate thousands of jobs in the renewable energy sector during and after construction.
The NDB’s support for clean energy initiatives is crucial in helping South Africa meet its commitments under the Paris Agreement.
The Greenhouse Gas Emissions Reduction and Energy Sector Development Project is estimated to reduce South Africa’s CO₂ emissions by over three million tonnes annually.
Moreover, the NDB’s focus on sustainable infrastructure, such as the $180 million Eskom Renewable Energy Integration Project, is modernising the country’s power transmission and distribution systems, improving grid reliability, and facilitating the integration of more renewable energy sources.
Beyond energy and infrastructure, the NDB-funded projects also facilitate the transfer of green technologies and knowledge, bolstering South Africa’s capabilities in sustainable development. The bank’s investments often have significant social impacts as well.
‘’The $179.2 million loan for the Lesotho Highlands Water Project Phase II aims to improve water supply and sanitation, thereby enhancing living conditions for millions of South Africans.
“These investments not only contribute to South Africa’s transition towards a more sustainable economy, but also foster long-term economic growth, enhance energy security, and improve the overall quality of life for South African citizens,” said one NDB representative.
The NDB’s approach to financing green projects aligns closely with South Africa’s national sustainability goals. The bank’s investments in renewable energy directly support the Integrated Resource Plan 2019, which aims to increase the share of renewable energy in the country’s energy mix.
The NDB’s $180 million loan for the Renewable Energy Integration Project aligns with the goal of adding 14.4 GW of wind power and 6 GW of solar power by 2030.
In addition, the NDB’s $300 million loan for the Greenhouse Gas Emissions Reduction and Energy Sector Development Project is a key contribution to South Africa’s commitment under the Paris Agreement to reduce greenhouse gas emissions by 42% by 2025.
The NDB’s support extends to South Africa’s Just Energy Transition Partnership (JETP), which aims to decarbonise the economy while ensuring a just transition for affected communities.
The bank has pledged $3 billion over five years to support South Africa’s JETP, with a focus on sustainable infrastructure and green energy.
These alignments ensure that NDB’s investments not only contribute to specific project outcomes but also support South Africa’s broader sustainability agenda, fostering long-term environmental, social, and economic benefits.
While the NDB has made significant strides in supporting South Africa’s green transition, the journey is not without its challenges. Henderson said that the slow pace of green project rollout and transmission grid constraints have hindered the effective deployment of capital.
Additionally, South Africa’s continued reliance on coal-fired power plants for energy security presents a challenge to the rapid scaling of renewable energy projects.
However, these challenges also present opportunities. South Africa’s potential for green hydrogen production is a promising area for NDB’s future investments.
Henderson also suggested that “the NDB could play a crucial role in financing the necessary infrastructure for hydrogen production, storage, and distribution, positioning South Africa as a key player in the emerging global green hydrogen market”.
Investing in energy storage solutions, green transportation, and climate resilience infrastructure are other areas where the NDB sees significant potential.
The success and sustainability of NDB-funded green projects in South Africa hinge on effective collaboration with local stakeholders and government agencies.
The NDB works closely with the South African government, particularly the National Treasury and the Department of Mineral Resources and Energy, to ensure that funded projects align with national development plans such as the Integrated Resource Plan (IRP) and the National Development Plan 2030.
Moreover, the NDB collaborates with local financial institutions, regulatory bodies, and private sector entities to mobilise additional resources and expertise for green projects.
The bank also engages with local communities through public consultations and stakeholder meetings to ensure that projects address local needs and gain community support.
This multi-faceted collaborative approach helps in building local capacity and ownership, which are essential for the lasting impact of these initiatives.
IOL Business