European Commission President Ursula von der Leyen announced on Thursday a major investment initiative that will inject €4.7 billion ($5 billion) into South Africa. The initiative is part of the European Union’s efforts to strengthen its influence amid shifting global dynamics.
Speaking at a summit alongside European Council President Antonio Costa and South African President Cyril Ramaphosa, von der Leyen revealed that the bulk of the investment €4.4 billion would be directed towards clean energy projects. This includes harnessing wind and solar power and producing clean hydrogen.
“We want to strengthen and diversify our supply chains, but we want to do it in cooperation with you,” she said. “Some countries are only interested in extracting raw materials and exporting profits elsewhere. That is not our model. We want to support local jobs, local added value, and high environmental and labour standards.”
Additionally, €700 million will be allocated to boost vaccine manufacturing in South Africa, a key player in Africa’s pharmaceutical industry.
“South Africa wants to protect the health of its people while ensuring its autonomy and strengthening local industries. We Europeans want to diversify some of our most critical supply chains. This is what I call true mutual interest,” von der Leyen added.
South Africa remains the EU’s largest trading partner in sub-Saharan Africa, exporting goods worth approximately €24 billion to the bloc in 2023, primarily minerals and automobiles. However, trade remains skewed in favor of the EU, with total two-way trade amounting to €49.5 billion that year.
EU foreign direct investment (FDI) in South Africa stood at around €71 billion in 2022, underscoring the bloc’s deep economic ties with the country.
The investment package comes at a time of heightened geopolitical tensions, particularly with the United States. Since the return of President Donald Trump to the White House, Washington has taken a tougher stance on South Africa, freezing key aid programs and criticizing some of its policies.
The EU has also felt the impact of US trade policies, with Washington imposing a 25% tariff on steel and aluminum imports from the bloc. On Thursday, Trump further escalated trade tensions by threatening to impose a 200% tariff on European wine, champagne, and other alcoholic products.
The EU’s renewed focus on South Africa highlights its efforts to maintain strong economic and political alliances amid a rapidly changing global landscape.
