Pretoria: The Export-Import Bank of the United States and South Africa have signed a $2 billion Declaration of Intent (DoI) to help advance the country’s green energy schemes.
The DoI between the Export-Import Bank and the Industrial Development Corporation of South Africa (IDC) will to help advance the South African government’s Integrated Resource Plan (IRP) and the South African Renewable Initiative (SARi).
The announcement by the bank’s chief on the sidelines of the South Africa-United States business summit will offer enormous opportunities for American companies in South Africa.
“This agreement will help ensure that the Export-Import Bank continues to provide financing to South African buyers that want to buy high-quality US goods and services. This partnership will help create jobs and lasting economic opportunities for both our countries,” Fred Hochberg, chairman and president of Export-Import Bank said.
Hochberg is part of the business delegation that has accompanied US Secretary of State Hillary Clinton on her visit to South Africa. She is in the country to boost trade and business ties between the two countries.
The deal comes as South Africa plans to double its power supply by adding more than 50 000 megawatts of electricity to the country’s grid, most of which is planned to come from green renewable energy sources.
The IDC is a national development finance institution set up to promote economic growth and industrial development. It is owned by government under the supervision of the Economic Development Department.
The Export-Import Bank is operational in over 180 countries and has identified nine key markets that offer great potential for US exports. South Africa was chosen as one of these markets due to the size of its economy and close trading and investment ties to the United States.
South Africa is the largest economy in Africa and the 29th largest economy in the world, with its GDP growth rate expected to be 2.2% in 2012 and 2.7% in 2013.
As the largest US export market in sub-Saharan Africa, with $7.3 billion of exports in 2011, South Africa is a key economic partner for the United States.