European Commission President Ursula von der Leyen unveiled plans on Thursday to inject billions of euros into South Africa, marking a significant investment move as Europe looks to strengthen its influence in the country, which has found itself in the crosshairs of the United States.
At a summit attended by European Council President Antonio Costa and South African President Cyril Ramaphosa, von der Leyen revealed a comprehensive €4.7 billion ($5 billion) investment package aimed at enhancing South Africa’s economy and environmental sustainability.
Of the total investment, €4.4 billion will be dedicated to clean energy projects, including the development of wind and solar power initiatives, as well as the production of clean hydrogen. This is part of the EU’s broader effort to diversify and secure supply chains, with a focus on sustainability and mutual benefit.
“We want to strengthen and diversify our supply chains. But we want to do it in cooperation with you,” von der Leyen stated. “Some countries are interested in just extracting materials from the ground and exporting profits elsewhere. That is not our model. We want to support local jobs, local added value, and high environmental and labour standards.”
In addition, €700 million of the package will be allocated to boosting vaccine manufacturing capabilities within South Africa, further strengthening the country’s health sector and its ability to produce essential goods locally.
“South Africa wants to protect the health of your people, as well as your autonomy and your local industries. We Europeans want to diversify some of our most critical supply chains. This is what I call a true mutual interest,” von der Leyen explained.
As the EU’s largest trading partner in sub-Saharan Africa, South Africa plays a pivotal role in Europe’s economic strategy. In 2023, two-way trade between the EU and South Africa reached €49.5 billion, with the EU importing goods such as minerals and automobiles, while the trade balance remains tilted in favor of the EU.
In 2022, EU foreign direct investment in South Africa stood at €71 billion, further solidifying the strong economic ties between the two regions.
This investment announcement comes at a time of heightened geopolitical shifts, particularly in relation to the United States. Under President Donald Trump’s administration, South Africa has faced significant policy pressure, including a freeze on critical aid and heavy criticism of various government policies. The U.S. has also imposed tariffs on steel and aluminum imports from the EU, with Trump recently threatening to impose a staggering 200% tariff on European wines and other alcoholic products.
Against this backdrop, the EU’s investment plans underscore its commitment to strengthening relationships with South Africa, focusing on sustainable development, and supporting local industries while navigating a shifting global landscape.
