South Africa is taking a bold step to revive its economy and prepare for a cleaner energy future. On June 24, 2025, the World Bank approved a $1.5 billion loan to support infrastructure upgrades and help the country transition to low-carbon energy systems.
This investment comes at a time when South Africa is battling long-standing economic and energy challenges. Years of poor infrastructure management and frequent power outages have hurt productivity across key sectors like mining, logistics, and manufacturing.
The new funding targets three priorities: improving electricity access, fixing freight transport systems, and expanding clean energy. According to South Africa’s National Treasury, this will ease major economic bottlenecks, especially in rail and port operations, which have suffered from underinvestment and poor performance.
Transnet, the state-run logistics company, has faced losses of over R1 billion per day due to delays and system failures. South Africa’s ports, once among the best in Africa, now struggle with global competitiveness. The loan aims to fix this by boosting operational capacity and unlocking new jobs in the process.
Beyond infrastructure, this loan also signals growing global support for Africa’s green transition. Over 80 percent of South Africa’s electricity still comes from coal. Load shedding from Eskom has become a near-daily occurrence, stalling economic activity and frustrating businesses.
With this funding, South Africa plans to upgrade the national grid and invest in cleaner energy solutions. This effort builds on the country’s earlier Just Energy Transition Partnership (JETP), which attracted over $8.5 billion in climate finance from G7 countries in 2021.
For African markets, this loan is more than a country-specific lifeline. It sets a powerful example for how development finance can align with climate goals and economic reform. Countries like Nigeria, Egypt, Kenya, and Ghana can take notes. Sound policy planning and a clear climate agenda are increasingly unlocking long-term capital.
In the bigger picture, the message is clear. Green infrastructure is not just about sustainability, it is also about unlocking inclusive growth, creating jobs, and building resilient economies across Africa.
