SUNREF South Africa fosters the emergence of a green finance offering tailored to the needs of various economic stakeholders while encouraging the private sector to put the clean energy transition at the heart of their economic development. Through adapted financial instruments and customized technical support hosted by SANEDI, AFD supports these investments by encouraging its local partner bank IDC to finance renewable energy and energy efficiency projects across all economic sectors in South Africa
Limited energy security and rising energy prices will likely continue to negatively affect the growth of South African businesses in the short to medium term. These trends, coupled with the negative environmental impact of existing inefficient energy consumption and coal-based electricity generation in the country, make green economy growth a priority in South Africa.
SUNREF is one of various innovative tools developed by AFD to promote the emergence of “green” finance tailored to the needs of economic actors in countries in transition. It aims to allow local financial institutions to take action to fight against climate change. In South Africa, AFD is doing this in partnership with the Industrial Development Corporation (IDC), its local partner bank, and the South African National Energy Development Institute (SANEDI).
SUNREF helps develop services with the IDC including customized financial support (low interest rates, long tenor) along with technical assistance to facilitate access to green energy to promote the sustainable management of natural resources in South Africa. The aim of SUNREF South Africa is to facilitate access to affordable sustainable energy, to allow companies to acquire energy efficient equipment, to make cost savings, to be more competitive through better energy-management and improved environmental performance and ultimately to reduce greenhouse gas emissions.
The technical assistance supports the IDC’s due diligence of projects by providing consultancy services to remove the risks associated with projects while giving marketing and communication support. This usually includes answering questions that emerge during the IDC’s project appraisal. As a major local actor in the promotion of renewable energy and energy efficiency, SANEDI is a key partner in the implementation of the technical assistance program.
Beneficiaries of the program can include private companies, institutions or even individuals wanting to develop renewable energy and energy efficient projects. Projects can be as varied as solar energy for power production (photovoltaics for instance), biogas to energy or projects for heat production (solar water heating systems). Energy from biomass can be financed, provided that the biomass resource is not originated by deforestation. SUNREF can also finance energy storage, improving existing businesses or buildings with energy efficiency and renewable energy products as well as supporting the development of small hydro or wind projects.