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The United Nations Economic Commission for Africa (UNECA) has announced that Pacific Investment Management Company (PIMCO) will loan the Development Bank of Southern Africa (DBSA) $210 million towards green energy developments. Signalling the first African green energy deal in a United Nations program, the loan aims to enhance renewable energy capacity across the continent.

The proceeds of this issuance will be used to refinance renewable energy generation and transmission projects and will add to the Bank’s pool of liquidity for further green power generation projects.

“The success belongs to South Africa and the DBSA for their single-mindedness in recognizing the value of attracting foreign private debt investment into the energy sector, and to PIMCO for committing to the green energy transition on the African continent,” stated Vera Songwe, Under-Secretary-General of the UN and Executive Secretary of UNECA. 

“We are gratified to help initiate this program for the UNECA and the continent and appreciate the endorsement from private international financial institutions such as PIMCO, which are not only engaged in the South African economy but see the particular opportunity in supporting our clean energy transition,” says Finance Minister H.E. Enoch Godongwana, who served as chairperson of the DBSA during the initiation and early stages of this transaction.

South Africa is one of the initial sponsors of the Sustainable Developmental Goals (SDG7) program and through H.E. President Cyril Ramaphosa’s office and the DBSA’s persistent efforts to finalize the deal – despite slowdowns associated with the pandemic – efforts have paid off. The SDG7 Program was launched in February 2020, with the purpose of deploying private capital in Africa to support the development and ensure access to affordable, reliable, sustainable, and modern renewable energy for all.

During the launch, PIMCO – which manages approximately $2.2 trillion in assets -announced its desire to act as a key investor of the program, which has engaged in assessing and structuring several potential assets from different countries, focusing first on refinancing debt to provide liquidity for further green generation.

“This first agreement for South Africa is an important signal to the many other countries interested in the SDG7 Program who recognize the value of attracting private capital to support economic growth and green industrialization,” stated UNECA executive secretary Dr Vera Songwe. “We look forward to concluding further transactions as part of the program in the very near future.”

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