The European Union is set to invest €4.7 billion in South Africa, with a focus on clean energy and vaccine manufacturing. This announcement came from EU Commission President Ursula von der Leyen during a summit with South African President Cyril Ramaphosa, where they discussed the need for collaboration to strengthen sustainable industries and generate local employment opportunities within South Africa itself.
A large portion of the funding will be used to support renewable energy projects like wind, solar, and clean hydrogen production in South Africa. Von der Leyen said that they're "focused on creating local value, not just extracting resources,". Additionally, €700 million will be used to expand South Africa’s vaccine manufacturing capacity, which South Africa sorely needs, and has been trying to indigenously produce vaccines for its populace.
South Africa is the EU’s largest trade partner in sub-Saharan Africa, with total trade amounting to €49.5 billion in 2023. The EU imports minerals and vehicles from South Africa, and as of 2022, EU companies have invested €71 billion in the country. Still, the trade balance leans heavily in favor of the EU.
This announcement comes as U.S. policies are shifting under President Donald Trump, who has recently imposed tariffs on EU steel and aluminum and has threatened to increase taxes on European alcohol. Additionally, Trump’s administration has frozen aid to South Africa, taking issue with some of its policies.