"Together with South Africa, we are committed to a decarbonization pathway," the EU's top diplomat, Josep Borrell, who is in Pretoria for talks, said in the statement.
The money will "support policy reforms on green recovery, unlock green investments and build a knowledge-based transition," the bloc said in a statement
The EU said the money came as part of the bloc's recently unveiled Global Gateway initiative, which is in part aimed at countering China's growing influence.
South Africa has championed complaints from developing nations that too much of the climate change aid they receive from rich countries comes in the form of loans instead of grants.
Part of the EU funds will go towards the greening of municipal services and help repurpose coal power plants.
South Africa, one of the world's top 12 largest polluters, generates about 80 percent of its electricity through coal.
The grants add to $8.5 billion that the continent's most industrialized economy was pledged in 2021 by the EU the Britain, France, Germany and the United States.
US Treasury chief Janet Yellen, who was also in South Africa on Friday, said Washington is contributing more than $1-billion under the scheme dubbed the Just Energy Transition Partnership.
The US "is firmly committed to this engagement," she said, as she visited the eastern Mpumalanga province, South Africa's coal mining hub.
Recent studies suggest more jobs will be created than lost in South Africa by going green, but analysts say the swap will not be painless.
"We must demonstrate quickly that these coal communities... will not be left behind in the context of an energy shift that benefits other regions," Yellen said after touring a US-funded renewable energy job training facility for women.