US bank to sign R16 billion green energy deal with SA

06 August 2012 - 19:03 By Sapa-AFP

The US Export-Import Bank is to sign a $2 billion deal with South Africa to fund a green energy scheme in the electricity-short country, the bank's chief said Monday.

"We are signing an agreement tomorrow for $2 billion for renewable energy exports from the US to South Africa," the bank's president Fred Hochberg told reporters.

"South Africa has one of the most forward-reaching energy policies in terms of diversity in power," he said.

"We are signing tomorrow and it goes into effect immediately," he added.

"We have been an active financier of solar and wind... energy all over the world," he said. "In fact last year we were the largest single financier of solar power in India, we would like to do the same thing here."

The agreement is to be signed on Tuesday during a visit by US Secretary of State Hillary Clinton, as part of her tour of Africa.

"It's a declaration of intent between Ex-Im Bank and the Industrial Development Corporation of South Africa to consider a financing option for up to $2 billion in credit in support of South Africa's energy sector," Charles Randolph, the US embassy energy officer told AFP.

South Africa plans to double its power supply by adding more than 50,000 megawatts of electricity to the grid.

The government plans to generate 3,725 megawatts of power from "green" renewable energy sources, as part of a $127 billion scheme to overhaul the national electricity system.

Clinton's tour to South Africa is aimed at boosting trade and business ties between the two countries.

Trade between the United States and South Africa shot up to $16.8 billion last year, up 18 percent from the previous year.

The United States is the third largest source of foreign direct investment in Africa's biggest economy.