South Africa

South Africa faces a two-fold challenge. For one, the country needs to transition to renewable sources of energy, such as wind and solar power. At present, 85 percent of its energy comes from coal and oil. Secondly, the government has to avoid increasing unemployment with its departure from the fossil fuel industry. At around 30 percent (as of 2021), the country’s unemployment rate is already one of the highest in the world. Making sure the transition into a carbon-neutral economy is socially just will play a decisive role in the fight against poverty and inequality.

To enable renewable energy sources to be integrated into the power grid, KfW is helping South Africa to upgrade its transmission and distribution network at both a national and local level. With German financial assistance, this will allow up to 5.5 million tonnes of CO2 to be saved every year. For the population, this means one thing above all else: the electricity supply will become more reliable and more secure.

As part of South Africa’s ambitious Renewable Energy Independent Power Producer Procurement Programme, KFW Development Bank is also supporting a special fund that provides small, independent energy producers with access to simple and efficient financing opportunities. For the future, plans are in place to expand Germany’s involvement in South Africa’s growing green hydrogen sector.

With its corrugated iron huts without any power or water, horrific sanitary conditions, young people without an education, work or a place to live, the slums of Soweto and Khayelitsha offer little hope for a better life. Violence is a huge problem here. For this reason, violence prevention measures that also strengthen municipal structures and good governance are a priority in German cooperation with South Africa. In the fight against social exclusion, inequality and marginalisation, one of the South African government’s top priorities is to promote a feeling of belonging, shared identities and norms for an inclusive society.

As a means to prevent violence, KfW finances initiatives such as urban renewal projects that improve public safety. The success of this approach is demonstrated by Khayelitsha and Helenvale. As well as building affordable housing, these projects also created safe public spaces, particularly those that are important to young people: schools, recreation areas, sports facilities. Advisory centres for domestic violence have also been set up. To strengthen the potential for helping people to help themselves, for social cohesion and for coordination of the relevant stakeholders involved, the projects always involve local people in the planning and implementation process. In the future, KfW is eager to work more closely with local and national authorities, in the hope that this will facilitate the ongoing implementation of violence prevention initiatives.

Project example - Conflict prevention (PDF, 175 KB, non-accessible)

Sub-standard education, low productivity, chronic poverty – the social and economic impacts of the apartheid are still visible in the informal settlements of large cities to this day. To promote fair economic development and good employment opportunities for all in these areas, the vicious cycle has to be broken – with good education and sustainable economic growth for decent employment.

Over 50 percent of young people in South Africa are unemployed – one of the highest rates in the world. President Ramaphosa has therefore declared the fight against unemployment, particularly among the young generation, as his top priority. Part of this national strategy involves reforms to the National Ministry for Higher Education and Training. At its core, this strategy is about improving training for teachers of technical and vocational courses and training programmes.

To improve quality in this area, KfW is financing a new teacher training centre – with modern facilities that are geared towards the needs of businesses. The key aim here is to establish strong links with industry in order to increase young people’s employment opportunities. To enable young people to advance their skills, KfW is also providing financial support to South African government agencies and partners involved in the Presidential Youth Employment Intervention initiative and its associated programmes.

South Africa has been hit particularly hard by the COVID-19 pandemic. To safeguard the supply of COVID-19 tests and fill an existing gap in its testing capacities, KfW provided EUR 3 million in 2020 for the procurement of diagnostic lab equipment and personal protective equipment. The equipment and materials were distributed to healthcare facilities across the country. In conjunction with the city of Cape Town, KfW also launched a project for digital food vouchers, as the pandemic resulted in significantly more people suffering from hunger and malnutrition. Digital food vouchers enable people to purchase food in real time and without any face-to-face contact or queues.

KfW is also active in the field of HIV and AIDS. That is because South Africa has more people infected with HIV than any other country in the world: almost 8 million. Women between the ages of 15 and 29 are particularly at risk. The South African government therefore launched its national HIV prevention programme “She Conquers” in 2016. It is geared towards girls and young women and is financed by KfW. KfW has been supporting the government in its fight against the HIV epidemic since as far back as 2009, with HIV testing centres built at the community level and HIV prevention programmes for young people. Funding is also provided for facilities to care for orphans and children at risk.

Rapid urban development, aging infrastructure and the effects of climate change – in South Africa, this problematic combination has led to a significant increase in the need for urgent investment. This is especially the case with water infrastructure, a fact that became particularly clear in 2017. The water shortage in Cape Town at this time was so acute that it culminated in something known as “Day Zero”, the day on which the water supply actually ran out. On behalf of the German Federal Government, KfW is therefore helping the city to restructure, upgrade and expand its 26 sewage plants for the treatment of wastewater. As part of this work, energy efficiency was also improved, operating costs were reduced and the Western Cape’s resilience to climate-related periods of drought was increased. Building on this success, KfW will also be expanding its work in the water sector to other municipalities to improve their resilience to climate change.