EU and SA announce R94bn package for new investments in clean energy, vaccine manufacturing

The European Union (EU) and South Africa have announced a €4.7-billion (R94-billion) package of new investments in South Africa, mainly for the transition to clean energy and for boosting vaccine manufacturing.

The “Global Gateway Investment Package” was announced at the 8th SA-EU summit, in Cape Town on Thursday. It will comprise €303-million in grants from the EU and its members and loans from the European financial institutions and SA’s development banks to leverage a further €4.4-billion in investments.

Ursula von der Leyen, the president of the EU Commission, who headed the EU delegation along with EU Council President António Costa, announced the programme. She said there was already almost €50-billion in annual trade between SA and the EU, and 98% of SA exports to the EU were duty- and quota-free.

President of the European Council Antonio Costa (L), South Africa's President Cyril Ramaphosa (C) and President of the European Commission Ursula von der Leyen (R) attend a joint press conference following the 8th South Africa-European Union (SA-EU) Summit at Tuynhuys in Cape Town on March 13, 2025. (Photo by Rodger Bosch / AFP)

President Ramaphosa (C) with President of the European Council, Mr. António Luís Santos da Costa(L) and the President of the European Commission, Dr Ursula von der Leyen(R) at Tuynhuys in Cape Town on 13 March 2025. (Photo: Jairus Mmutle GCIS)

The investment package would take that further.

President Cyril Ramaphosa welcomed the EU initiative, which he said would support strategic investment projects.

“The investment package covers areas such as critical raw mineral processing, green hydrogen, renewable energy, transport and digital infrastructure, local vaccine and pharmaceutical production, resources for skills development.”

He and Von der Leyen announced that the EU and SA had also agreed to launch negotiations for a Clean Trade and Investment Partnership to boost the competitiveness of their economies.

“This will support the development of cleaner value chains for raw materials and local beneficiation, renewable and low carbon energy, and clean technology.

“In addition to mobilising investment, this partnership will also serve as a forum for regulatory cooperation between the European Union and South Africa in areas of mutual interest related to clean supply chains.

“This partnership is expected, for example, to deliver short- and long-term solutions to enable Sasol to export sustainable fuel, especially aviation fuel, to the European Union.”

Von der Leyen said the €4.7-billion package would be mutually beneficial as South Africa wanted to protect the health of its people, as well as its autonomy and local industries, while the EU wanted to diversify some of its most critical supply chains.

She said the Clean Trade and Investment Partnership would support SA’s ambition to add more value to local production in South Africa, for instance in the clean hydrogen value chain.

“South Africa has everything to become a global leader: You have clean energy in abundance, from wind to sun. You have raw materials that are critical for electrolysers, including 91% of the world’s platinum group metal reserves.

“And you have a rising industry to produce clean hydrogen and strong export ambitions. European companies are interested in investing here. But they need more incentives.” The Clean Trade and Investment Partnership would support that, unleashing investments in clean energy, raw materials and green hydrogen.

World stage

Von der Leyen and Costa expressed full support for SA’s G20 presidency which has come under sustained attack from the Trump administration. They particularly supported SA’s themes of solidarity, equality and sustainability, which US Secretary of State Marco Rubio rejected as “DEI.” (Diversity, equity and inclusion.)

Von der Leyen said, “We are here today to strengthen the already close ties between our nations and our citizens. South Africa has a vital role on the world stage. You are a leading voice of the Global South.

“We are united by our democratic values and our shared commitment to unity and diversity. But we also share fundamental interests, from ensuring peace and stability on our continents, to boosting sustainable economic growth and strengthening our supply chains.”

President Ramaphosa (C) with President of the European Council, Mr. António Luís Santos da Costa(L) and the President of the European Commission, Dr Ursula von der Leyen(R) at the 8th SA-EU Summit at Tuynhuys in Cape Town on 13 March 2025. (Photo: Jairus Mmutle GCIS)

President Ramaphosa (C) with President of the European Council, Mr. António Luís Santos da Costa(L) and the President of the European Commission, Dr Ursula von der Leyen(R) at the 8th SA-EU Summit at Tuynhuys in Cape Town on 13 March 2025. (Photo: Jairus Mmutle GCIS)

Costa noted that the world had changed profoundly since the last EU-SA summit was held seven years ago, with the Covid pandemic, Russia’s war against Ukraine, the eruption of violence in the Middle East and conflicts in Africa.

He said multilateralism and the rules-based international order were being challenged.

“In such times our partnerships matter more than ever,” he said, especially the EU’s strategic partnerships — like that with SA, the only one in Africa.  He said the summit had confirmed the value of the EU partnership with SA.

Ramaphosa responded by saying that in a time of global instability, the friendship with the EU was even more important.

“We appreciate the support of the EU for our G20 presidency and particularly our priorities and themes,” he said.

Troops in DRC

Ramaphosa was asked at the post-summit press conference to say when the SA troops trapped in eastern DRC would be coming home, after a SADC summit had decided earlier in the day to terminate the SADC Mission in DRC.

Ramaphosa did not answer the question directly but indicated that the pace of withdrawal would depend on the progress of negotiations for a ceasefire, which had also been agreed to at the SADC summit.

He commented on the visit of Ukrainian President Volodymyr Zelensky to SA next month, saying he would encourage Zelensky to seek a negotiated end to the war. He said SA would convey the same message to Russia.

Ramaphosa said the fact that negotiations were now under way — a reference to the talks being brokered by the US — had vindicated SA’s much-criticised position that one should engage with both sides in the conflict.

He confirmed that the EU had agreed to negotiate some relief from the Carbon Border Adjustment Mechanism (CBAM), the controversial levy which the EU is introducing on the carbon content of imports.

He said the negotiations would deal with SA proposals such as exemptions or the postponement of CBAM. Von der Leyen said the EU had already agreed on some exemptions such as for smaller companies, to ease compliance with the measure.

She emphasised that CBAM was a climate not a trade measure though SA and other African countries have complained to the EU that it will be burdensome, as it would add to the costs of their exports to the EU. DM