Cape Town — South African Finance Minister, Enoch Godongwana, has defended the alleged R19 billion loan the government received from the World Bank to deal with energy crisis.
The loan was for the government to reform the energy sector and said it was a sovereign loan that did not require a any collateral or a guarantee. The loan was based on a number of reforms that it had completed, as reported by IOL.
Godongwana said the repayment will start in 2029 and will end in 2038, with South Africa given a five-year grace period. The loan was granted to help South Africa’s energy crisis.
This comes after Electricity Minister, Kgotsientso Ramokgopa, revealed that stage 6 load shedding cost up to R1 billion a day. Godongwana said the R19billion loan has to do with electricity challenges.
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“The instrument used for this loan is a Development Policy Operation (DPO), which means this loan is provided to South Africa on the strength of a completed set of policies and reforms. The institutional reforms that are referenced on the DPO fall under climate change and the electricity sector, mostly covered under Necom (the National Energy Crisis Committee),” said Godongwana, who was replying to a written parliamentary question from DA MP Samantha Graham-Mare.
Gondogwana said the funding was categorised as a budget support loan that was aimed to support South Africa’s economic recovery inclusivity and accelerated growth and that the loan will take effect within 90 days of signing the loan agreement.
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Compiled by Matthew Petersen
