The World Bank will loan South Africa $1bn (£830m) to help the country resolve its energy crisis as it battles with its worst-ever power cuts.
There have been power outages since 2007 but they have escalated in recent years, with blackouts of up to 16 hours a day.
According to the World Bank, the frequent power cuts have severely impacted South Africa’s economy, slowing its GDP growth.
“The loan endorses a significant and strategic response to South Africa’s ongoing energy crisis and the country’s goal of transitioning to a just and low carbon economy,” the World Bank said in a statement on Wednesday, after its board approved the loan.
More than 80% of South Africa’s electricity is generated by burning coal. As a result, the country is ranked as the world’s 14th largest emitter of carbon dioxide.
The World Bank said that the loan will allow South Africa to reform the country’s state-owned power company, Eskom, which has more than $26bn of debt.
