Cape Town - Following the recent release of the country’s Just Energy Transition Partnership (JETP) Investment Plan, the JETP reached a milestone on Wednesday at the UN climate conference, COP27, where France and Germany signed loan agreements that will see each nation extend R10.7 billion towards South Africa’s de-carbonising efforts.
The JETP was established at COP26 last year to signify a collaboration between South Africa and the International Partners Group (IPG) to fasttrack the country’s reduced reliance on coal through a Just Transition to cleaner energy sources.
The two loan agreements form the first part of the R153bn pledged by the IPG and indicates that actual money will now begin to flow to South Africa – though the R153bn pledge was just a snippet of the R1.5 trillion investment plan President Cyril Ramaphosa handed over to the IPG on Monday for the next five years.
A dialogue on “Financing the Just Transition in South Africa” was hosted by the Presidential Climate Finance Task Team and the Presidential Climate Commission on Wednesday at the South Africa pavilion, on the sidelines of COP27 in Sharm El-Sheikh, Egypt.
France and Germany extend €600mio (nearly 11bn ZAR) in financing to support South Africa’s transition from coal, @CyrilRamaphosa, @Bundeskanzler and @EmmanuelMacron announced at #COP27 !
This is one of the first concrete results of our #JustEnergyTransition Partnership. pic.twitter.com/zkfzLZhhVO
A moderated panel discussed how to ensure the money was allocated accordingly and accountably to meet South Africa’s Just Transition needs.
Daniel Mminele, head of the Presidential Climate Finance Task Team, said the loans would be provided by the French and German public development banks AFD and KfW, directly to the South African government via its National Treasury, and this money would likely flow early next year.
However, the big push after COP, Mminele said, was for them to develop an implementation plan to track progress, ensure accountability and set up governance structures.
“This is what we are going to do without delay in the first quarter of next year and have it finalised so that we can get to the real hard work, the actual implementation of the JETP,” Mminele said.
Lebogang Mulaisi, Cosatu head of policy and Presidential Climate Commission commissioner, said there was increasing anxiety about job displacement among people who worked in industries that relied on fossil fuels and the coal value chain.
Mulaisi said they needed to address what these plans, deals and concepts meant in terms of bread and butter needs of the ordinary workers that relied on these sectors – which may become displaced if the Just Transition is not carried out holistically.
“Policymakers and decision-makers in the room need to take this into account when crafting these investment plans, financing decisions and conditions of how these finances are used.
“My concern is that we stand a risk of replicating the same economy that is not currently efficient and calling it a Just Transition, and not venturing deep enough into the substance of what a Just Transition actually means,” Mulaisi said.
kristin.engel@inl.co.za