Ramaphosa hails R230bn EU investment package to power South Africa’s green growth

President Cyril Ramaphosa has welcomed a new €11.5 billion (about R230 billion) investment package from the European Union (EU), describing it as a major step toward building South Africa’s “economy of the future” while strengthening long-standing trade and diplomatic ties with Europe.

Ramaphosa said the package “opens new possibilities for trade and investment” and marks the start of “a new era of partnership and cooperation” between South Africa and the EU.

The announcement was made jointly by Ramaphosa and European Commission President, Ursula von der Leyen, on the sidelines of the Global Gateway Forum at the European Commission’s headquarters last week.

Ramaphosa said the investment would support growth in several priority sectors, including green hydrogen, renewable energy, critical minerals, electric battery manufacturing, and vaccine production. The package will also fund infrastructure development across rail, roads, ports, logistics, and digital connectivity.

Approximately R173bn is earmarked for Just Energy Transition, R24bn for the Just Component, R20bn in infrastructure and connectivity, and R6bn in building the pharmaceutical value chain. 

“These investments will help to build the economy of the future in the South Africa of the present. We welcome the special focus on skills, small business development, and research and development. This is vital for the development of our people, our most valuable resource,” Ramaphosa said. 

The EU remains South Africa’s largest trading partner and one of its most important sources of foreign direct investment, accounting for 41% of total FDI into the country. More than 2 000 EU companies operate locally, supporting over 500 000 direct and indirect jobs.

Ramaphosa said the new investment package advances the goals of the Clean Trade and Investment Partnership, agreed during the South Africa–EU Summit in Cape Town in March 2024. The initiative aims to promote clean energy transition, technology transfer, skills development, and strategic industrial growth across African value chains.

Ramaphosa expressed confidence that the partnership would accelerate South Africa’s just transition to a low-carbon economy, while positioning Africa as “the next frontier of clean global production.”

In March, the EU announced a €4.7bn Global Gateway package with South Africa: mainly to boost connectivity, with a strong emphasis on boosting local vaccine production and biomanufacturing capabilities during the EU–South Africa Summit in Cape Town,

During her meeting with Ramaphosa last week, Von der Leyen also announced that EU Member States are putting forward almost €12bn to support the ambition of the EU-South Africa Just Energy Transition Partnership to become global leaders in clean energy.

"There are already so many inspiring projects on the ground. South Africa is not only transforming itself, it is becoming a clean energy pioneer for the entire continent. Global Citizen has started a campaign that is scaling up renewables in Africa. 600 million people in Africa still have no access to electricity," she said.

"This campaign goes on for a year and will be culminating in Johannesburg at the G20. We are working hand in hand to mobilise investments under our “Scaling Up Renewables in Africa” campaign, together with Global Citizen. And today, I am delighted to announce a new package of €618 million from Team Europe as a pledge to this campaign. This will support projects of electrification, modernising power grids, and expanding access to renewable energy."

The Congress of South African Trade Unions (Cosatu) welcomed the EU's investment package, saying it was a welcome boost to the economy, jobs, local businesses, infrastructure, including energy generation capacity. 

Matthew Parks, Cosatu's parliamentary coordinator, said these will be an important investment to boosting energy generation capacity, reducing carbon emissions and expanding critical economic infrastructure. 

"Whilst welcoming this progressive announcement by the European Commission and South African government, it is important that these financial commitments be in the form of investments and grants, not loans. South Africa needs to manage our debt trajectory very carefully and avoid further indebtedness, in particular foreign currency denominated debt that threatens to place us in a dangerous debt trap," Parks said. 

"This Investment Package is a positive vote of confidence in South Africa as the leading industrial economy in the African continent and a strategic partner for the European Union."

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