US Exim has signed a US$2bn deal with South Africa to fund a green energy scheme in the electricity-short country.

The bank signed a declaration of intent with the Industrial Development Corporation (IDC) of South Africa this week to back the South African government’s Integrated Resource Plan (IRP) and the South African Renewable Initiative (SARi).

The funds will be used to support US technologies, products and services to South Africa’s energy sector, with an emphasis on clean energy development.

The agreement was signed during a visit by US secretary of state Hillary Clinton as part of her tour of Africa.

South Africa plans to double its power supply by adding more than 50,000 megawatts of electricity to its national grid. The government plans to generate 3,725 megawatts of power from green renewable energy sources, as part of a US$127bn scheme to overhaul the national electricity system.

Trade between the US and South Africa shot up to US$16.8bn last year, up 18% from the previous year.

The US is the third largest source of foreign direct investment in Africa’s biggest economy.