The World Bank is providing South Africa with a $1 billion loan to aid in addressing the country's energy crisis, which has worsened due to its most severe power cuts.

The country has been grappling with power outages since 2007, and these disruptions have intensified in recent years, leading to daily blackouts lasting as long as 16 hours.

These frequent power cuts have had a detrimental impact on South Africa's economy, causing a slowdown in its GDP growth, as noted by the World Bank.

“The loan endorses a significant and strategic response to South Africa’s ongoing energy crisis and the country’s goal of transitioning to a just and low carbon economy,” the World Bank said in a statement on Wednesday, after its board approved the loan.

Burning coal produces more than 80% of the electricity used in South Africa. The nation is therefore listed as the 14th largest carbon dioxide emitter in the world.

According to the World Bank, the loan will enable South Africa to restructure its state-owned electricity company, Eskom, which is in debt totaling more than $26 billion.