While Germany crumbles: Government invests 500 million euros in Africa's energy transition

While the municipal infrastructure in Germany is crumbling and funding programs have to be cut back in many places, the Federal Ministry for Economic Cooperation and Development (BMZ) is relying on generous investments abroad.

On the sidelines of the G20 Development Ministers' Meeting in South Africa, German Development Minister Alabali-Radovan (SPD) announced a new financing commitment. A loan of €500 million from the state development bank KfW is intended to help the South African government restructure its energy sector, specifically in the expansion of grids for wind and solar power plants. The goal, according to the ministry, is to support reforms in the energy sector.

190 million euros for the “Green Baseload Initiative for Africa” project

The new loan is part of the G7's "Just Energy Transition Partnerships" (JETP). The goal of the partnership is to promote a global energy transition. Germany had already committed to supporting South Africa, together with partner countries, in its coal phase-out at the COP26 UN Climate Change Conference in November 2021.

The multi-million euro loan follows additional funding provided by Germany. The current BMZ budget includes a total of 25 million euros for the "Green Baseload Initiative for Africa" for 2025 alone. To date, 190 million euros have already been invested in the project, which aims to secure Africa's baseload energy supply with renewable energies – guaranteeing electricity supply without coal and heavy fuel oil.

What priorities does a ministry set when it is simultaneously facing difficult rounds of cuts in its own country? Development Minister Alabali-Radovan points out that German companies would also benefit from such partnerships. The opposition criticizes. On the other hand, cuts to parental allowance are being discussed in Germany, and municipalities are struggling to finance swimming pools and bus routes.