The South African government has welcomed the €4.7 billion (R93.5bn) package announced by the European Union (EU) to support strategic investment projects in the country.

During the SA-EU Summit in Cape Town on Thursday, leaders of the EU announced the multi-billion euro as part of the Global Gateway Investment Package.

“We are presenting a new €4.7bn Global Gateway investment package for South Africa for projects that support a just energy transition, for connectivity – both physical and digital, and for vaccines, produced in Africa, for Africa,” said Ursula von der Leyen, President of the European Commission.

“Today we’re taking our trade and investment relations forward. We’re launching talks on a next-generation trade deal and a clean trade and investment partnership with a focus on strategic industries – and benefits for both sides.

“€4.4bn from the Global Gateway package will go to projects supporting a clean and just energy transition in South Africa. It's a significant first pledge in the context of the scaling up renewables in Africa campaign. I hope it will inspire many others to contribute.”

President Cyril Ramaphosa said the investment package covered areas such as critical raw mineral processing, green hydrogen, renewable energy, transport and digital infrastructure, local vaccine and pharmaceutical production, and resources for skills development.

“To boost the competitiveness of our economies, we agreed to launch negotiations towards a Clean Trade and Investment Partnership. This will support the development of cleaner value chains for raw materials and local beneficiation, renewable and low carbon energy, and clean technology,” Ramaphosa said.

“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.”

South Africa is the EU’s largest trading partner in Sub-Saharan Africa, with €49bn worth of trade in goods in 2023.

The summit, which coincided with South Africa’s presidency of the Group of 20 nations, was an opportunity to intensify the EU’s partnership with South Africa, which is a strategic partner for the EU in a challenging context of rising populism and geopolitical instability.

Ramaphosa said the Summit focused on strengthening trade and investment relations, which are vital for the growth of our economies and the achievement of South Africa’s development goals.

“We have prioritised the transition to green energy, ensuring that this process is just and inclusive and safeguards the livelihoods of those most affected by the transition. We also had discussions on our robust cooperation in education; science, technology and innovation; and health,” Ramaphosa said.

“We have recognised the vital importance of developing the skills and capabilities of young people, starting from early childhood development through to the training of young people in the skills of the future.”

Ramaphosa also said the Summit reaffirmed the commitment to multilateralism, the rule of law and the central role of the United Nations in maintaining global peace and security, and expressed the resolve to resist actions that undermine multilateral cooperation.

António Costa, President of the European Council, reiterated Ramaphosa’s remarks, saying the discussions had reaffirmed the strength and depth of their enduring and strategic partnership.

Costa said they were fully committed to working together to strengthen multilateral institutions by reforming them in a way that they are more representative, and also by reforming the international financial institutions to have a fairer world in the future.

“We believe in strong multilateral institutions, a rules-based order, open dialogue, and global cooperation to tackle common challenges — whether in security, trade, climate action, or innovation. This summit has demonstrated that our partnership is not only strategic but also essential,” Costa said.

“To address global instability and insecurity, we have decided to launch a dedicated EU-South Africa Peace, Security, and Defence Dialogue. We reaffirm our commitment to supporting peace efforts in Ukraine, the occupied Palestinian Territories, Sudan, South Sudan, the Democratic Republic of Congo, and beyond.”

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EU pledges R93. 5bn investment package to support South Africa in strategic investment initiatives