EU Pledges €4.7B Investment Package for South Africa for Energy Transition and Vaccine Equity
On 13 March 2025, the 8th European Union (EU) – South Africa (SA) Summit took place in Cape Town, South Africa, and was co-chaired by SA President Cyril Ramaphosa, the European Commission President Ursula von der Leyen and European Council President Antonio da Costa. The EU announced a USD 5.1 billion (ZAR 93 billion) investment package mainly to support the #EnergyTransition and #VaccineEquity of South Africa under the Global Gateway Initiative (#GGI).
South Africa is the largest trading partner of the EU in sub-Saharan Africa with a bilateral trade volume over EUR 50 billion in 2024. Interestingly, the trade is more or less balanced as exports of goods from EU to South Africa totaled EUR 26 billion, while imports of goods by EU from South Africa is about EUR 24 billion.
The EU is looking to diversify its supply chain while South Africa led the charge for the Just Energy Transition (#JET) and Vaccine Equity initiative following the COVID pandemic. Therefore, Von der Leyen believes the deal is truly a win-win for both parties.
The strengthening of ties between EU and SA ties occurs in the particular context of the tariff-based protectionist approach adopted by US President Trump. As a matter of fact, Trump threatened to impose yet another 200% tariff on European alcoholic drinks following an announcement by EU to hike the tariff on American whisky, which was initially a response to US tariff on steel and aluminum. In addition, Trump withdrew the US from climate commitments, including the #ParisAgreement and the Just Energy Transition Partnership (#JETP).
In 2025, South Africa holds the presidency of the #G20 and the US is basically boycotting the G20 preparatory meetings in South Africa by sending low-level representatives. The USA alleges that South Africa is expropriating land from white landlords without due process, an allegation which South Africa has refuted.
In any case, it would appear that the EU and South Africa are both moving away from USA, but moving closer to each other. It is worth recalling that the last 7th EU-SA Summit took place in Brussels in 2018 and the bilat was put on ice as COVID swept across the globe. Both sides might have Trump to thank for a closer ties as countries seek alternatives in the face of a confrontational US.