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Germany's special envoy for the Just Energy Transition Partnership with South Africa Rainer Baake says his country's ongoing commitment to the initiative is reflected by the fact that Germany has more than doubled its original financial commitment to €2.68-billion, from the initial 2021 pledge of €986-million.

He also reported that more than €1.4-billion had already been disbursed under the programme, which is scheduled to run to 2027.

Speaking in Pretoria at the tail-end of a visit to South Africa, Baake said the increase was a direct response to the strong demand for both the grant and concessional finance set aside to support projects and policies being implemented in line with the investment programme developed by the South African government.

Having held more than 40 meetings during his visit – mostly with private companies but also with government officials – he reported "huge appetite" for the funding, particularly from the renewable-energy sector.

Refusing to be drawn on recent comments by Electricity and Energy Minister Dr Kgosientsho Ramokgopa that the price of the debt component was too high, Baake noted that the policy loans extended to government by KfW involved interest rates that were "considerably cheaper" than prevailing market rates.

Three such loans with a combined value of €1.3-billion had already been disbursed to the National Treasury upon the implementation of agreed energy sector reforms.

The first €300-million policy loan extended in November 2022, with a 20-year maturity and five-year grace period, carried a variable rate at the time of signing of 3%, which had since reduce to 2.8%; this against market rates of 8.9%.

The second €500-million loan approved in 2023 had a 15-year maturity and three-year grace period, and carried a fixed interest rate of 4.4%, which compared favourably to 12-year Eurobonds issued by the National Treasury in late 2023 that attracted rates of between 7.1% and 7.95%.

The third €500-million loan approved in July 2025, with a 13-year maturity and three-year grace period, had a 4.31% fixed interest rate, against dollar-denominated bonds issued by the National Treasury at the time bearing a 6.25% interest rate.

A similarly concessional €150-million loan had been approved in favour of the City of Cape Town in December 2024 for electricity infrastructure.

Baake reported that concessional loans worth €1.07-billion had also been approved for electricity, green hydrogen and skills-development projects, as well as to support municipalities, alongside grants totalling €125.6-million.

He acknowledged the headwinds that had developed internationally in relation to the energy transition, but said that Germany and the other remaining International Partner Group countries were committed to providing ongoing support to South Africa's Just Energy Transition Investment Plan (JET-IP).

While the US had withdrawn, the remaining original partners of France, Germany, the UK and the European Union had since been joined by Denmark and the Netherlands in their support for the JET-IP.

He also acknowledged the challenge that loadshedding had posed to the implementation of the programme, as South Africa had not been able to retire coal plants in line with their original decommissioning schedule.

REFORM MOMENTUM

Nevertheless, for economic and commercial reasons, he said South Africa's transition was poised to continue as there was no contradiction between climate and economic goals, with renewables being the cheapest source of new electricity.

He also applauded the reform progress being made in South Africa's electricity sector to open it to private investment and competition, underlining the importance of the introduction later this year of a wholesale electricity market, which he hope would form the precursor for retail competition in future.

"Where I live right now, in Berlin, you could choose between 180 retail companies, and if you go to the smallest town in Germany, you will still have at least 20...

Engineering News editor Terence Creamer discusses the World Bank and International Monetary Funds' upgraded economic growth outlook for South Africa, as well as the trade and geopolitical risks that the country will have to navigate.

After nearly a year of rumours about its possible closure, the axe has finally fallen on Nissan's assembly operations in Rosslyn, Pretoria.

The Japanese group announced last year that it would close seven plants out of a global network of 17 manufacturing sites as the struggling carmaker reported a net loss of $4.5-billion for the financial year that ended in March, amid surging restructuring costs and the fallout of US President Donald Trump's trade war.

Production in South Africa fell to around 17 000 units in 2024, as the Rosslyn-based facility was forced to end assembly of the popular NP200 half-ton bakkie and continue only with the Navara pickup.

Production volumes at Nissan South Africa (SA) had steadily hovered short of 25 000 units a year for the last few years, down from well over 54 000 units in 2012.

Navara assembly is expected to end in May.

It's not all bad news for the South African automotive industry and the employees at the Nissan South Africa plant, however, as popular Chinese importer Chery is in the pipeline to acquire the plant.

Chery has been a rising star in the domestic market, and currently sells well over 2 000 new vehicles a month, with the broader group – which includes brands such as Omoda, Jaecoo and Jetour – boosting that number to almost 5 000 units a month.

Nissan on Friday confirmed that it had reached an agreement on the sale of its manufacturing assets in Rosslyn.

The Japanese vehicle brand will, however, continue selling vehicles in South Africa and is not exiting the market. New product releases for 2026 will include the Nissan Tekton and Patrol.

Nissan has been active in South Africa since 1961.

Nissan said Chery SA will purchase the land, buildings and associated assets of the Nissan facilities, including its nearby stamping plant, in the middle of this year.

The agreement will see roughly 700 out of the 800 Nissan employees within the plant being offered employment by Chery SA on what Nissan says will be "substantially similar terms and conditions as today".

"Nissan has a long and proud history in South Africa and has been working to find the best solution for our people, our customers and our partners," commented Nissan Africa president Jordi Vila.

"External factors have had a well-known impact on the utilisation of the Rosslyn plant and its future viability within Nissan.

"Through this agreement we were able to secure employment for the majority of our workforce, thereby also preserving opportunities for our [parts] supplier network.

"This move also ensures that the Rosslyn site will continue contributing to the South African automotive sector," said Vila.

A spokesperson for Chery SA told Engineering News Online that the car maker cannot yet confirm what vehicle it aims to assemble at Rosslyn, or the purchase price for the facility.

The Presidency's Rudi Dicks, who is overseeing the economic reforms being implemented under Operation Vulindlela, says the unbundling of Eskom's transmission business cannot be done "half-heartedly" if South Africa is to introduce the competition needed to help improve electricity affordability.

Speaking during a panel discussion hosted by Bowmans on the financing of South Africa's just energy transition, Dicks expressed his support for the full unbundling of the transmission business and assets from Eskom Holdings.

He argued that this was necessary in light of the importance of the grid, and the expansion of the transmission infrastructure, to the introduction of new private generation capacity and to ensuring that transmission investments did not favour the "incumbent".

"You've got to unbundle Eskom [and] not half-heartedly. You've got to unbundle it so as to be able to utilise the transmission assets to allow for investments in renewables, hybrid, gas, and others to be transmitted across the grid.

"If we allow the existing transmission assets to remain [with Eskom Holdings], what will happen is that investment in transmission will be for the incumbent," he said, arguing that this was not a criticism of Eskom but a lesson from how both public and private incumbents operated globally when allowed to do so.

He added that the high price of electricity had emerged as the key challenge facing consumers and that competition, including public sector competition in the form of Eskom Green, held the most promise for addressing the problem of affordability.

In December, a revised unbundling strategy was approved for Eskom Holdings.

Under the announced structure, the National Transmission Company South Africa (NTCSA) will remain a subsidiary of Eskom Holdings and will continue to own the transmission assets, while a separate Transmission System Operator will be set up outside Eskom to handle system and market operation, but without owning the underlying infrastructure.

The approach has been criticised by Professor Anton Eberhard, of the Power Futures Lab at the University of Cape Town's Graduate School of Business, who argues that it is not supportive of the accelerated investment needed to ensure security of supply, particularly with various coal stations being retired in 2030.

South African Photovoltaic Industry Association CEO Dr Rethabile Melamu has also expressed concern about whether NTCSA will be able to secure the funding needed for new grid investment, as well as whether there will be non-discriminatory treatment of Eskom Generation when compared with independent power producers.

When announcing the new strategy, however, government indicated that it was aimed at preserving the financial stability of the Eskom Group by minimising disruptions to its highly leveraged balance sheet.

A new online portal has been launched to enable project originators and/or financiers to determine quickly whether the project being assessed aligns with the principles of South Africa's just transition and could, thus, qualify for just-transition financing.

Developed by Trade and Industrial Policy Strategies (TIPS), the Just Transition Finance Tool is free to use and has been designed to provide a consistent, evidence-based way to assess a project's just credentials using an algorithm that interrogates the project's climate, socioeconomic and community objectives.

TIPS research fellow Sandy Lowitt says this "three-legged stool" approach can be employed across projects of all sizes, be it a multibillion-rand energy or industrial investment, or small-scale community cooperatives seeking seed funding.

Lowitt stresses, however, that the tool is limited to assessing the project's 'just transition' credentials and offers no view on the project's commercial viability, and does not replace the need for a due diligence.

Given that South Africa's project pipeline includes climate-related developments and initiatives driven by socioeconomic objectives – such as employment creation, service delivery and community development – the tool incorporates two assessment gates: a green, or climate-led gate; and a socioeconomic improvement-led gate.

Both pathways require meaningful contributions across all three legs of climate, socioeconomic and community improvement, but the thresholds are adjusted to reflect the project's primary purpose.

This, Lowitt explains, avoids penalising projects that are socially transformative but not primarily environmental in nature.

On completing the online submission, which involves clear definitions, dropdown menus and guided activity lists to remove ambiguity, applicants will receive an instant response informing them whether or not a project qualifies.

Qualifying projects also receive a certificate with a unique QR Code as proof that the project meets the just transition project criteria. However, TIPS is still seeking formal recognition for this certification, ideally through a government sponsor.

TIPS is also keen to enter into partnerships with financial institutions so that applicants whose projects fail to secure certification can be offered feedback, as well as guidance on how to improve the project's credentials.

The tool has, thus, been developed to be embedded into third-party websites to facilitate such partnerships.

Lowitt expressed optimism that the move to standardise the way just-transition projects are assessed will help address some of the challenges that have arisen since the launch of South Africa's Just Energy Transition Investment Programme (JET-IP) in 2023.

There has been particular concern over the slow implementation of projects, limited funding disbursements from the international donors that pledged more the $12-billion in support of the JET-IP, as well as so-called 'just transition washing', whereby conventional projects have been rebranded in a bid to access funding.

The Just Transition Finance Tool, which was launched formally at an event hosted by Bowmans, can be access through: https://www.tips.org.za/projects/just-transition-finance

JSE-listed automotive group Metair has finalised the formation of its new aftermarket parts and retail division, in line with the group's strategy of diversification through the establishment of dedicated business divisions.

The new focused division will be led by a former ZF Group MD, Gerhard Braun, who will report to group CEO Paul O'Flaherty.

Metair says Braun will be responsible "for driving operational excellence, whilst ensuring that each brand retains its distinct value proposition and continues to serve its customer base effectively".

The new division includes five separate verticals, being AutoZone, MOVE, ATE, First Battery and QSV.

"This marks an important step in our ongoing strategic reset, which is designed to ensure a robust and sustainable, growth-oriented Metair," says O'Flaherty.

"Our carefully considered divisionalisation focus will enhance strategic clarity, operational efficiency and financial transparency, enabling us to better serve the respective markets and customer segments.

"It will also maintain brand and channel independence, which are key elements of our agile operating model, as we advance the group's overall strategic ambitions."

The new division, and its verticals, will be supported by the recently implemented Metair Group Shared Services, which encompasses the finance, IT, human resources, payroll and company secretarial functions.

First Battery's manufacturing operations will be established as its own operating unit within Metair's second division – Automotive Component Manufacturing – which includes Hesto Harnesses, Automould, Lumotech, Unitrade, Supreme Spring and Smiths Manufacturing.

"I am pleased to welcome Gerhard to the Metair Group," notes O'Flaherty.

"He brings 25 years of experience in the automotive sector, having held senior leadership roles both across Africa and internationally.

"His career includes MD roles at ZF Group, business unit leadership at Tenneco, and leading franchise operations for Motus.

"We look forward to his positive impact as we build the new division and shape the Metair of the future."

The International Monetary Fund (IMF) has made a small 0.2 percentage point upward revision to South Africa's projected growth for 2026 in its January World Economic Outlook (WEO), forecasting that the economy will grow by 1.4% this year.

Its 2027 growth projection of 1.5% for South Africa, which was published in October, has been sustained, while the January WEO estimates that South Africa's GDP expanded by 1.3% in 2025.

The IMF update for South Africa is in line with projections released by the World Bank in its January 'Global Economic Prospects' report, as well as the IMF's small upward revision for global growth.

The IMF expects the global economy to expand by 3.3% in 2026, also a 0.2 percentage point upward revision relative to its October report. It has sustained its 3.2% projection for world growth in 2027.

Global headline inflation, meanwhile, is expected to decline from an estimated 4.1% in 2025 to 3.8% in 2026 and further to 3.4% in 2027.

"This steady performance on the surface results from the balancing of divergent forces," the report states.

"Headwinds from shifting trade policies are offset by tailwinds from surging investment related to technology, including artificial intelligence (AI), more so in North America and Asia than in other regions, as well as fiscal and monetary support, broadly accommodative financial conditions, and adaptability of the private sector."

The January WEO also forecasts that growth in sub-Saharan Africa will accelerate from 4.4% in 2025 to 4.6% in 2026 and 2027.

This upward revision is supported by buoyant conditions for certain commodities produced in Africa, macroeconomic stabilisation in some countries, and reform efforts in key economies, with research department division chief Deniz Igan making specific reference to South Africa's structural reforms during a media briefing.

However, the January WEO also warns that risks to the outlook remain tilted to the downside, with economic counsellor and director of the research department Pierre-Olivier Gourinchas confirming that the current outlook assumed that there would be no additional hike in tariffs by the US beyond those imposed last year, as well as no trade policy retaliations by other countries.

TARIFF RISKS

However, the IMF confirmed that the projections used in the January WEO Update were finalised before the end of December, predating the US military's capture of Venezuelan President Nicolás Maduro and a threat by US President Donald Trump that he would impose additional tariffs on several EU countries that he felt were impeding his acquisition of Greenland.

On January 17, Trump issued a tariff ultimatum to Denmark, Norway, Sweden, Finland, France, Germany, the Netherlands, and the UK, indicating that a 10% tariff would be imposed on February 1, rising to 25% on June 1, unless an agreement was reached on America's "complete and total purchase of Greenland".

Gourinchas noted that the upgrade to the WEO growth outlook in January relative to October was partly attributed to the fact that the tariffs imposed by the US, as well as the retaliatory actions taken by other countries, were more moderate than had been anticipated when Trump first announced the Liberation Day tariff in April. In addition, US retailers had refrained from passing on the costs of the higher tariffs to consumers.

For this reason, geopolitical risks and further trade tensions were among the key downside risks highlighted by the IMF.

"We are establishing our projections in the WEO under the assumption that the level of tariff remains unchanged," Gourinchas said, indicating that its current projections were for the effective US tariff rate being imposed on the rest of the world to remain at about 18.5%.

"If we were to enter a phase in which there would be [tariff] escalations and tit-for-tat policies … that would certainly have even more of an adverse effect on the economy, both through direct channels, but also through confidence, investment and potentially...

Isuzu Motors South Africa has launched the MVR bus chassis in South Africa, fitted with a Marcopolo Torino body.

Designed as a dedicated commuter bus chassis, the local arm of the Japanese vehicle maker is especially proud of its soft ride bus suspension system.

"This configuration, featuring multi-leaf springs, shock absorbers and stabiliser bars at both the front and rear, ensures a smoother ride, while maintaining optimal stability and handling – a significant improvement over the truck-based bus chassis used by many competitors."

Sporting a 6 000 mm wheelbase, the chassis measures 11 594 mm in length and 2 367 mm in width, translating to an overall 12 600 mm by 2 600 mm with the bus-body installed.

Powering the MVR is Isuzu's 7.79-litre inline six-cylinder 6HK1-TCS diesel engine, delivering 221 kW at 2 400 rpm, and 980 Nm of torque from 1 450 rpm.

The engine is paired with a six-speed Eaton manual transmission.

The bus also features a full air foundation braking system, exhaust brake and a magnetic retarder mounted to the rear of the transmission.

With its higher stance compared with truck-based alternatives, the MVR offers superior approach and departure angles, which makes it ideal for both urban and rural environments, says Isuzu.

Inside, the bus can accommodate 66 seated passengers, seven standing passengers, plus the driver.

LED headlamps and tail lamps, automatic headlights-on and anti-lock braking are standard on the bus.

Optional comfort features include air-conditioning, USB charging ports and a sound system.

Isuzu Motors South Africa commercial vehicle and light commercial vehicle product planning department executive Kevin Fouché says the introduction of the new bus chassis is a "major step forward from previous Isuzu models and competitor offerings".

"The MVR is designed from the ground up as a true bus chassis.

"Every component, from the suspension to the transmission and retarder, has been optimised for passenger comfort and efficiency. The result is a durable, fuel-efficient and reliable solution requiring minimal modification during body installation."

Engineering News editor Terence Creamer discusses the December announcement by power utility Eskom and government of a revised unbundling plan for the State-owned entity; the reasons given for not transferring ownership of Eskom's transmission assets to the Transmission Systems O

The immediate priority of the Electricity Market Advisory Forum (EMAF), which was appointed by the National Energy Regulator of South Africa (Nersa) in December, will be to offer input on the regulatory instruments needed to facilitate the launch of the South African Electricity Wholesale Market (SAWEM), including the market code and rules, as well as the trading arrangements and platform.

The 14-member EMAF is yet to be formally convened, but Nersa executive manager for electricity regulation Rhulani Mathebula has been appointed by the regulator to chair the forum, which is expected to be formerly launched in the coming weeks.

The other members have been named as Mutshidza Nndwamato, of the Association of Municipal Electricity Utilities; Letlhogonolo Tsoai, of Business Unity South Africa; Mutenda Tshipala, of Eskom Holdings; Dr Willem den Heijer, of the Ferro Alloy Producers Association, Shreelin Naicker, of the Financial Sector Conduct Authority; Lovemore Chilimanzi, of the South African Electricity Traders Association; Craig Morkel, of the South African Oil and Gas Alliance; Nicole Loser, an attorney and legal consultant to the Just Energy Transition Africa Initiative; Dr Graeme Chown, an independent consultant, Professor Katleho Moloi, of the University of South Africa; Professor Simon Roberts, of the University of Johannesburg, Dr Thando Vilakazi, of the Competition Tribunal; and Dr Tracy Ledger, of the Public Affairs Research Institute. Alternate members include Professor Vally Padayachee, of the Association of Municipal Electricity Utilities and Tendani Mutshutshu, of Eskom Holdings.

The EMAF, which has been appointed to advise the regulator in line with provisions for such structures in the National Energy Regulator Act, is expected to be in place for six years; enough time to oversee the creation of the SAWEM and the establishment of the independent Transmission System Operator envisaged in the Electricity Regulation Amendment Act.

The forum's composition and mandate could be revised following the completion of a mid-term review in three years, however, Nersa has also reserved the right to appoint further members at its discretion.

Mathebula tells Engineering News that the terms of reference and operational model, including meeting schedules, will be finalised collectively once the EMAF has been formally convened.

However, the forum's initial agenda will be driven by the impending launch of the SAWEM, which is still set for April; a timeline that depends in large part on Nersa providing its approval to the faciliatory regulations and instruments required for the functioning of the market.

"I also want to stress that the EMAF does not replace public consultations and hearings and is not a decision-making body.

"Rather, what the regulator is acknowledging is that there are expertise in the industry … that can benefit the work of the regulator, as well as the country, and the regulator is using this vehicle to access that pool of expertise to improve the quality of its decisions."

The members of the EMAF were selected from a long list of about 40 names arising from nominations made by the public.

While electricity supply industry knowledge was an important criteria in the final selection, Nersa strategic adviser Mark Beare said the regulator also wanted to include individuals with other expertise, particularly in relation to the environment, consumer protection and competition.

"The Electricity Regulation Amendment Act is clear that it wants a competitive market. So, it was felt that in amongst all the other skill sets, competition was going to be an important one," Beare tells Engineering News.

The issue of genuine and fair competition within the SAWEM also arose during recent hearings into the National Transmission Company South Africa's application for a Market Operator licence, which was subsequently approved.

Some stakeholders urged Nersa to play close attention to the balance between Eskom Generation's fixed and...