The guarantee, approved in late 2023, is due to lapse at the end of this year.
The facility was designed to support loans tied to South Africa’s shift toward cleaner, more resilient energy systems.
In written responses, the United Kingdom’s Foreign, Commonwealth and Development Office said it is looking for a way to maintain support for South Africa’s decarbonisation drive beyond the expiry date.
The agreement was designed to help South Africa reduce its deep dependence on coal, which still accounts for about 80 percent of power generation.
Implementation has been sluggish, in part due to a limited pipeline of bankable projects that meet lenders’ requirements. Despite the slow progress, Germany and France have already released concessional loans to the South African Treasury, and all partners have issued grants to support various initiatives.
US, South Africa pathways
The United States withdrew from the pact earlier this year following the inauguration of President Donald Trump, leaving the remaining countries to reassess their commitments.
The proposed loan would target water and electricity losses and strengthen basic infrastructure across four municipalities in Mpumalanga. This province hosts most of the country’s coal mines and power stations.
The Treasury said the programme is intended to shift local service delivery toward a model that draws more heavily on private sector capabilities.
According to the department, the core aim is to expand private participation through performance-based contracts that support utility reform and accelerate improvements in service delivery.
