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South Africa Secures Climate Loans at Fraction of Market Rates

  • Funding will cut future interest bill, finance minister says
  • Godongwana also highlights need to fix state logistics company
The bulk of South Africa’s climate funding will be used to bolster electricity production as Eskom Holdings SOC Ltd. plans to close many of its dilapidated coal-fired power plants in coming years.

The bulk of South Africa’s climate funding will be used to bolster electricity production as Eskom Holdings SOC Ltd. plans to close many of its dilapidated coal-fired power plants in coming years.

Photographer: Dwayne Senior/Bloomberg
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Some of the loans South Africa secured as part of an $8.5 billion climate finance package will cost a fraction of what it would have paid commercial lenders and will cut the country’s future borrowing costs, Finance Minister Enoch Godongwana said.  

“When we get these loans, in fact they are between 500 and 400 basis points lower than we would have paid in the market,” Godongwana said in an interview in Johannesburg on Thursday, without being more specific. “We would have raised that money anyway.”