South Africa is seeking climate funding from Germany’s development bank KfW and France’s Agence Française de Développement worth €600 million ($599.19 million), with negotiations at an advanced stage, news24 portal said, citing treasury’s acting chief director for liability management Wanga Cibi.

The loan is part of the $8.5 billion committed by international partners, including the UK, the US, the European Union, Germany and France, at COP26. 

The climate funding is part of the “Just Energy Transition Partnership” (JETP), which will help South Africa decarbonise its coal-intensive energy sector and develop the green hydrogen and electric vehicle industry.

Germany has announced earlier €355 million in grants and loans over the next two years. 

In its policy statement, South Africa’s treasury stated that the fiscal policy would offer economic incentives for green energy, with carbon tax being one of the government’s mechanisms to prevent greenhouse gas emissions.  

The treasury has said that a paper on design options for tax-free allowances under the carbon tax would be published soon for public comment and consultation, the newspaper said.

(Editing by Seban Scaria