The EU is investing $5 billion in South Africa to support clean energy, vaccine production, and economic growth, strengthening ties after the U.S. cut aid.

The European Union (EU) has pledged to invest $5 billion (€4.7 billion) in South Africa's aid and development projects, EU Commission President Ursula von der Leyen announced on Thursday.

A significant portion of these investments will be directed toward advancing South Africa's clean energy transition, with a strong focus on enhancing wind, solar, and hydrogen power production. In addition to supporting renewable energy initiatives, the funds will also be allocated to vaccine manufacturing, further strengthening South Africa’s healthcare and pharmaceutical sectors.

“South Africa wants to protect the health of [its] people… We Europeans want to diversify some of our most critical supply chains. This is what I call a true mutual interest,” von der Leyen stated during the announcement.

The investment commitment was made during the first bilateral summit between the EU and South Africa in seven years. The meeting, held in Cape Town, aimed to strengthen ties between the two economic partners. South Africa holds a key position as the EU’s largest trading partner in sub-Saharan Africa and the continent's most industrialized economy.

During the summit, South African President Cyril Ramaphosa emphasized the global challenges impacting economic relations. He pointed to an increasing trend of "unilateralism and economic nationalism," a reference to the policies of former U.S. President Donald Trump and their lasting effects on international trade.

The summit also followed the United States’ decision to withdraw nearly all aid to South Africa, raising concerns about funding shortfalls in critical areas such as HIV/AIDS treatment. The sudden reduction in U.S. financial support has created uncertainty in sectors that have long relied on American assistance.

Despite these challenges, Ramaphosa reaffirmed South Africa’s commitment to working closely with the EU. “What is going on in the world is even going to strengthen our resolve to remain partners in order to tackle the many challenges that are arising,” he told reporters.

Von der Leyen emphasized that the EU’s approach to economic partnership differs from that of other global powers. "Some countries are interested in just extracting materials from the ground and exporting profits elsewhere. That is not our model," she asserted.

Instead, she highlighted the EU’s commitment to supporting local industries, saying, “We want to support local jobs, local added value, and high environmental and labor standards.”

The EU-South Africa summit marks a renewed commitment to collaboration, with the EU stepping in as an even larger partner following the withdrawal of U.S. aid. The $5 billion investment plan signals a strategic effort to strengthen economic ties and promote sustainable development in South Africa.