The U.S.green industry just got a $2 billion bump, thanks to Sec. of State Hillary Clinton’s visit to Africa for the South Africa-United States business summit in Johannesburg.
A side deal at the summit has been agreed upon between the US Export-Import (Exim) Bank and the Industrial Development Corporation of South Africa.
Under the terms of the declaration of intent, Exim Bank will offer $2 billion in loans to South Africa to fund renewable energy projects, which will then be given to US firms.
The financing will be in the form of 18-year loans. It’s a win-win deal, with a huge boost for sustainable development and renewable energy in South Africa, and $2 billion in new projects for US firms.
Exim Bank president Fred Hochberg said that the agreement goes into effect immediately and projects related to wind, solar and thermal power will be among those funded. He added that the bank was the largest financier of solar power in India last year, and they want to do the same in South Africa.
South Africa has set a target of doubling its power supply by adding 50,000 MW more to their grid. Out of this, 3,725 MW is supposed to come from renewable energy sources.
The $2 billion deal with the US is a small part of the $127 billion investment South Africa expects to make to expand, upgrade and modernize the entire electricity production and distribution system. Companies that may benefit from the $2 billion deal include General Electric Co., SolarReserve LLC, and Siemens AG.
In her speech at the U.S.-South Africa Business Partnership Summit, Sec. Clinton said that, “We want sustainable partnerships in Africa that add value rather than extract it.”
Sec. Clinton also urged South Africa to speak with the Overseas Private Investment Corporation (OPIC) regarding the U.S.-Africa Clean Energy Finance Initiative announced at the Rio+20 summit targeting development of energy capacity in Africa.