South Africa is seeking to raise about 3.7 trillion rand ($228 billion) over the next decade to reduce the impact of greenhouse gas emissions and support its transition to cleaner and more sustainable energy systems.
The country’s National Treasury disclosed this in a newly published sustainable-finance framework, which outlines how South Africa intends to mobilise funding for environmentally and socially beneficial projects through green, social and sustainability-linked financial instruments.
The framework provides guidelines for issuing sustainability-focused loans and bonds that will fund both new and existing projects with environmental and social value, while also setting standards for how financing decisions will be made.
Greenhouse gas emissions refer to gases such as carbon dioxide and methane that trap heat in the atmosphere and contribute to global warming and climate change, largely through activities like burning fossil fuels, industrial production and deforestation.
Projects targeted under South Africa’s green finance framework
According to the framework, projects eligible for funding include hydrogen manufacturing, hydropower generation, geothermal electricity, and bioenergy development. The plan also allows funding for electricity transmission infrastructure, renewable and low-carbon gas distribution networks, as well as energy-efficient technologies for homes and industries.
“This initiative aims to align the country’s funding strategy with its sustainability objectives, attracting sustainable finance to support South Africa’s decarbonization commitments in a just and inclusive manner,” the Treasury said in the document.
The new framework comes amid criticism that South Africa has moved too slowly in attracting climate-focused investment despite mounting pressure to reduce its heavy dependence on coal and meet global climate obligations. The plan also arrives more than five years after the government first announced intentions to develop a green bond framework.
The Treasury estimates that implementing the country’s environmental commitments and mitigation strategies between 2026 and 2035 will cost about 3.72 trillion rand, averaging roughly 372 billion rand annually. South Africa plans to source around 160 billion rand annually from international climate-finance institutions by 2030, while the balance is expected to come from private-sector investment and domestic spending.
Why South Africa is accelerating its transition away from coal
South Africa’s latest financing push signals what appears to be a renewed effort to diversify its electricity sector away from coal toward cleaner and more sustainable energy sources.
The country remains heavily dependent on coal-fired electricity generation. According to Eskom’s August 2024 power generation fact sheet, South Africa operates 15 active coal-fired power stations with a combined installed capacity of about 45,310MW. Coal currently accounts for more than 85 percent of the country’s total electricity generation capacity of over 53,000MW.
Gas-fired plants contribute around 2,426MW through four quick-response turbine stations, while nuclear energy contributes 1,934MW from the Koeberg Nuclear Power Station, Africa’s only operational nuclear facility.
In line with efforts to reduce dependence on coal, Eskom is currently in early discussions with the World Bank over funding for a proposed 5.2GW nuclear power expansion project aimed at strengthening long-term electricity supply and supporting cleaner generation.
The utility has also commenced construction of a $73 million (R1.2 billion) 75MW solar power plant at the Lethabo power station in the Free State. The project is notable for being Eskom’s first utility-scale renewable energy development built on the site of an existing coal-fired power station.
South Africa leads Africa’s solar energy growth
Africa recorded its strongest year yet for solar energy growth in 2025, with South Africa and Nigeria emerging as key drivers of new installations, policy development, and private-sector investment across the continent.
According to the Africa Market Outlook for Solar PV: 2026–2029 report released by the Global Solar Council (GSC), eight African countries installed more than 100MW of solar capacity in 2025, compared with only four countries the previous year.
South Africa led the continent with 1.6GW of new solar installations, while Nigeria added 803MW and Egypt contributed 500MW.
The report also noted that nearly 44 percent of new solar capacity additions came from distributed energy systems such as rooftop solar installations, mini-grids, and commercial and industrial solar projects, although official figures may not fully capture the scale of these deployments.