Aluwani Capital Partners head of equity and balanced funds, Patrick Mathidi, says South Africa’s Just Energy Transition (JET) is a cause for concern.
The plan is to progress the evolution for the transition towards a cleaner and greener energy future.
This comes after the National Treasury announced that government has signed a loan agreement with the World Bank, the German government and the African Development Bank.
The loans will be at below market rates to support the transition.
Mathidi says these loans will add to the debt that the government already has, which will have to be paid back eventually.
“Well, what it does [means] is [that] we will have to find a cleaner source of energy that can supplement what Eskom does. But financially though, what it means is that we are having more and more debt.”
“And, therefore, we need the economy to be strong enough to generate growth such that the National Treasury is able to repay all the amounts of debt that we currently have, not just the energy transiting debt,” adds Mathidi.
The podcast below is the full interview with Patrick Mathidi on SAFm’s First Take SA:
