Just transition loans have generous terms, says Treasury
Loans from France and Germany are already reflected in SA’s gross borrowing requirement
The terms of the two €300m loans (about R10bn in total) provided by public development banks in Germany and France to support SA’s transition to a low-carbon economy are “highly concessional” and offers “more generous” terms that what the government would have been able to raise in capital markets.
The Treasury said on Thursday that the loans from the French development bank (AFD) and Germany’s KFW each have a maturity of 20 years, including a five-year grace period. The AFD loan will have to be paid back at an interest rate of 3.6% (equal to the six-month Euro interbank offered rate [Euribor] plus 129 basis points) and the KFW loan has an interest rate of 3% (six-month Euribor plus 69 basis points)...
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