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IOL News
6 days ago
- Business
- IOL News
Is JETP the savior of South Africa - or is it about to make the embattled country's problems worse?
Just four years after its announcement, the Just Energy Transition Partnership is under heavy scrutiny. Image: File JETP is a multi-year project to assist South Africa with decarbonisation, with the support of governments around the world, including France, the Netherlands, Germany, the UK, and the European Union, also known as the International Partners Group (IPG). However, just four years after its announcement JETP is under heavy scrutiny, experts say the groundbreaking multi-billion-dollar scheme to decarbonise South Africa is now under threat of collapse, against a backdrop of a local economy addicted to coal, skyrocketing coal imports to the EU, claims of modern colonisation, concerns over transparency, and crumbling support. Europe's decision to dramatically increase coal imports from South Africa - just months after announcing the JETP plan - raises doubts about how serious they really are about helping the country move away from coal. On the surface, JETP looks like a way to transition South Africa toward cleaner energy, but when you take a closer look, it's unclear who will actually benefit and whether there's a real long-term strategy in place. Celine Tan, who is a professor of International Economic Law and co-director of the Centre for Law, Regulation and Governance of the Global Economy, has spent almost a year leading an investigation into the financing of energy transitions in developing countries. Tan says that JETP in South Africa has been 'rushed' and is 'politically expedient'. "[JETP] is so ambitious but it has not really been thought through - we have heard from partners it has been very chaotically done." Celine said that her research had thrown up a multitude of issues, from an apparent lack of reskilling and relocating workers to a lack of assessment on energy needs, to disruption from new green energy systems such as dams or hydrogen plants, to the type of financing - the list goes on. "The quality of financing is suspect," she says. "A lot of it is debt-based and loans. When we looked into types of financing, there were a lot of guarantees, blended finance, and pledges to go into joint ventures." Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ The South African JETP has a lot riding on its shoulders. This is a pilot project to demonstrate how developing countries can be supported in decarbonising by developed countries through public and private investment, and transition to a low-emission, climate-resilient EU says the partnership is expected to prevent up to 1-1.5 gigatonnes of emissions over the next 20 years, more than 50 times the yearly emissions of London. To date, international pledges to the South African JETP are at $12.8 billion (R229bn). A report from the Project Management Unit (JET PMU), which was set up in the South Africa's President Office in January 2023, reveals that out of the $12.8bn llocated, only $764 million is free funding (grants). More than $8bn comes as loans that must be repaid, and just under $2bn is in export credits, meaning much of the money is not simply being given to South Africa - it is tied to conditions. Nearly $9bn of the $12.8bn comes from partner countries, while the rest is made up by multilateral development banks, such as the World Bank. According to the first quarter report of 2025, $583m of the grants have been allocated, with the majority going into electricity, green hydrogen, and the just transition in Mpumalanga, South Africa's biggest coal mining region. Alex Lenferna, the founder of Climate Justice Coalition (CJC), questions the funding techniques and says it is crucial to protect ordinary working people and ensure renewable energy is affordable and accessible. "With JETP, there is a big push with foreign investment, but there is no such thing as a free lunch. With the liberalisation of energy markets, they are opened up to the private sector, meaning those who have access to wealth can most take advantage," Lenferna said. The Africa Climate Alliance argues that climate financing through debt can have crippling effects and that to decarbonise, debt relief is crucial. 'Debt relief and fair carbon finance is essential in allowing countries to reinvest in sustainable industries instead of relying on coal revenues'. Member of Parliament Kevin Mileham, who sits on the Portfolio Committee on Electricity and Energy, says the loan funding built into JETP is a huge debt burden on South Africa's already fragile economy. For this reason alone, he says that JETP needs to be urgently rethought. "I think that the whole program probably needs a review of what its goals are and how they are going to be implemented, Mileham said. Mileham says that if the transparency and implementation of JETP do not drastically improve, in five years the money will have been "frittered away and there won't be anything to show for it." President Cyril Ramaphosa entrusted the JETP to the Presidential Climate Commission (PCC), a multi-stakeholder body tasked with overseeing the facilitation and creation of a framework to meet the objectives of the JETP. In 2023, the PCC released the JET Investment Plan (JETIP), outlining a vision and investment strategy for the first five years while aligning with its defined just transition principles. The same year, JET PMU was established by the Presidency to provide an implementation roadmap for the Just Energy Transition Investment Plan. The Just Energy Transition Project Management Unit (JET PMU) published a detailed Grant Register that shows where grant funding has been allocated, but no such document exists for the loans. During the fanfare of the new scheme, many of the declared loans were apparently allocated even before an investment plan was released, meaning that projects developed and paid for pre-JETP were added to the IPG's JETP grants. Tracey Davies, the executive director of Just Share, a South African non-profit shareholder activist organisation, says the Grant Register was picked up by media in February 2024, and showed that since November 2021, R10bn (about $591m) had been allocated to 145 projects. By the time the JET Investment Plan was unveiled by President Cyril Ramaphosa on November 4, 2022, 89 of the 145 projects, worth more than R5.3bn, had already commenced. "I don't see any evidence of that overarching plan. The projects are disparate and don't appear to link up to each other. A lot of them are repeating work that's already been done. There's no clarity on how the loans and the concessional loan funding are being managed. And as far as I can tell, nobody outside the IPG or the PMU has a handle on how that money is being allocated. I mean, nobody knows," Davies said. Julia Taylor, a researcher on Climate and Inequality at the Southern Centre for Inequality Studies at the University of Witwatersrand, worries that JETP funding is not nearly enough to meet the demands of South Africa's social, environmental, and energy issues, particularly because of the low levels of grant funding. She also argues that the JETP has not generated significant new grant funding but has taken existing projects and labelled them JETP projects, with grant funding going to consultants and private sector companies doing feasibility studies into areas she believes are not critical to South Africa, such as green hydrogen. ''People who are most interested in green hydrogen are European countries like Germany. And there's been a huge push from those countries for alternative fuel sources. The idea is that we'll then export back to them. Is that in the interest of South Africa's just transition? I don't think so…we don't even have enough electricity ourselves to run our economy. Why would we then be building more renewable energy for green hydrogen?," Taylor said. Getting word from some government departments involved in JETP seems to back up the air of confusion and opacity around the scheme. A government spokesman said that the Department of Mineral Resources and Energy (DMRE), charged with leading sustainable development in South Africa's mining and energy sectors, 'ceased to exist as of March 31, 2025', meaning they would not discuss anything prior to that point and redirected us to the PCC. When we reached out to the PCC for comments, Blessing Manale, the head of communications and outreach could not provide us with answers to many of our questions noting that the PCC is not in a 'position to respond'. Manale noted that the 'PCC supports the JETP. When the JETP was released, we made recommendations on strengthening it. We collaborate with the JET_IP PMU in its implementation as well as monitoring and evaluation of its impact. We have made additional recommendations on various aspects of Climate Finance.' \ Guarding against green colonialism Sonja Boschoff, a member of the National Council of Provinces representing the Mpumalanga province, says that South Africa must make sure it's in charge of its own transition to avoid green colonialism and must 'guard against a transition imposed and dominated by external actors'. Just months after the EU announced the JETP and its commitment to supporting South Africa in a just phase-out of coal, Europe's coal imports from South Africa increased eightfold, reaching 3.54 million tons by 2024 - a 77% increase over 2021, according to Reuters. Much of this renewed interest came after Russia invaded Ukraine in 2022, and the EU imposed sanctions on Russian coal and gas, causing European countries to turn to other coal suppliers.
News24
05-05-2025
- Business
- News24
Backing SA's green future with over R2bn for just transition projects
The challenging global context has not deterred our commitment to the Just Energy Transition Partnership with South Africa, it has reaffirmed it, writes the International Partners Group (IPG). The IPG consists of donor countries — United Kingdom, Germany, France, the European Union, Denmark and the Netherlands - who have pledged climate finance in the form of commercial debt and equity, concessional loans and grants to help South Africa achieve its climate ambitions and a just transition to a low carbon economy. Last week South Africa hosted the second Energy Transitions working group as part of its G20 Presidency. This was a critical moment to reflect on the important priorities set out by South Africa, including the delivery of just, affordable, reliable and inclusive energy transitions. To limit global warming to 1.5°C it is essential that we work towards a global reduction in emissions from fossil fuels, and the energy sector will have to lead the way. Exceeding 1.5°C risks potentially irreversible consequences, affecting the natural and human systems that keep us alive. As the world's 15th largest emitter of greenhouse gases, and as chair of the G20, South Africa's contribution is crucial. The countries of the IPG are aligned with South Africa on the importance of decarbonising our economies, while ensuring access to secure and affordable energy for all. To support these objectives, the Just Energy Transition Partnership was launched at COP26 in 2021. It is a partnership underpinned by a clear commitment to those directly affected by the energy transition. Workers, communities, and especially women and girls, must not be left behind. No country should have to choose between fighting poverty and fighting climate change. READ | ANALYSIS | South Africa vs US: What's really at stake We recognise that much has already been achieved but that difficult decisions will still need to be made. If managed well, the energy transition will be a source of job creation and economic growth. According to the World Bank, South Africa could create 815 000 direct jobs in the transition, significantly more that the estimated 302 000 jobs that would be lost. The challenging global context has not deterred our commitment to the JETP. It has reaffirmed it. Almost $12.8 billion (approximately R226.36 billion) of funding has now been pledged by IPG members and other partners committed to supporting South Africa. To date over $2.6 billion (R46 billion) of IPG funding has been allocated, including over $583 million (R10.3 billion) of grant funding. Of the grants, 30 projects totalling $116 million (R2.1 billion) are "Just" projects, aiming to create viable economic alternatives in coal-dependent regions, to ensure no community is left behind. For example: the Netherlands has partnered with Eskom to create agricultural jobs near the Grootvlei power plant; the UK is supporting citrus and nut farming and SMEs in Mpumalanga, aiming to create up to 3 200 local jobs; Denmark and France have provided 300 poor households in coal mining areas with energy access through solar; the EU is partnering with municipalities to improve delivery of water, energy services, and public infrastructure; and Germany, with co-funding from Switzerland, is providing measures for improving transition into employment to over 1 200 young people and support to over 500 SMMEs and entrepreneurs. IPG support is offered across all the pillars of South Africa's Just Energy Transition Implementation Plan, including electricity. The IPG are sharing expertise and financing to help improve energy infrastructure and implement an energy market. This is critical in achieving a sustainable and secure energy future for South Africa. For example, France and Germany have provided over EUR1.5 billion (R30 billion) in concessional loans to the government focused on managing the social impact of the just energy transition and Germany and Denmark have provided technical assistance to the government and Eskom to enable progress towards the liberalisation of the energy market. READ | SA pursues climate loans from Germany, UK as US walks away Germany's concessional financing of EUR150 million (R2.9 billion) for the City of Cape Town is strengthening grid infrastructure and the UK's Development Finance Institutions are providing innovative guarantees totalling $117 million (R2.1 billion) to trading companies to unlock renewable energy capacity through energy trading. Collaboration is at the heart of our JETP approach. A successful transition requires the continued knowledge and insights of South African universities, industries, businesses, and communities. We are committed to working with them all and ensuring as much project funding as possible is allocated locally. We know that the transition to a new energy future is a long and challenging journey that impacts the lives of all South Africans. All the countries of the IPG can be counted on as responsible, committed and reliable partners, and we are proud to support South Africa towards achieving a just and sustainable energy future that benefits all South Africans. This is a joint opinion piece by the International Partners Group which consists of the United Kingdom, Germany, France, the European Union, Denmark, and the Netherlands.
Zawya
19-03-2025
- Business
- Zawya
Joint Statement from the International Partners Group on the United States (US) Withdrawal from the Just Energy Transition Partnership in South Africa
The partnership, originally announced at COP 26, aims to support South Africa to move away from coal and to accelerate its transition to a low emission, climate resilient economy. The US contribution to South Africa's Just Energy Transition (JET), as set out in the JET Investment Plan, was $56m in grant funds and $1bn in commercial debt/equity from the US International Development Finance Corporation (DFC). While the withdrawal of the US is regrettable, the International Partners Group (IPG) remains fully committed to supporting South Africa to deliver its just energy transition. The level of investment made to date and remaining pledges demonstrate this. Over $2.5bn of the IPG pledge has been spent to date. The total pledged funding to support South Africa's just energy transition also remains higher than the original pledge due to increases in pledges from both the IPG and other development partners who are not part of the IPG. Some partners are exploring possibilities for supporting work previously being carried out by the US. We look forward to continuing to work with the government of South Africa and other stakeholders to allocate existing funding in support of a just energy transition that will benefit all South Africans. The political, technical and financial support from the IPG remains strong and steadfast. On behalf of the International Partners Group – United Kingdom, Germany, France, the European Union, Denmark and the Netherlands. Distributed by APO Group on behalf of United Kingdom Foreign, Commonwealth and Development Office.
Zawya
07-03-2025
- Politics
- Zawya
South Africa notes the decision by the United States Government to withdraw from the Just Energy Transition Partnership
USA President Donald Trump signed Executive Order 14162 in terms of which the United States is engaging in a re-prioritisation exercise and is thus revoking and rescinding the U.S. International Climate Finance Plan issued by the previous administration, including policies that were implemented to advance JETP. As a result, effective immediately, the USA has announced the termination of its membership of the International Partners Group (IPG) for JETPs South Africa, Indonesia and Vietnam. With the USA withdrawal, associated financial pledges are also withdrawn. Grant projects that were previously funded and in planning or implementation phases have been cancelled. South Africa notes the decision and remains committed to the implementation of international agreements, including decisions taken at the historic Paris Climate Change Conference. South Africa and other international partners will evaluate the implications of the US withdrawal from the JETP. Distributed by APO Group on behalf of Republic of South Africa: Department of International Relations and Cooperation.
Los Angeles Times
06-03-2025
- Business
- Los Angeles Times
The U.S. has withdrawn from a climate agreement that helps developing nations, South Africa says
JOHANNESBURG — The United States has withdrawn from a climate agreement where rich nations have pledged billions of dollars to help a small group of developing countries switch from coal to green energy sources in a possible blueprint for future deals to cut carbon emissions, one of the participating countries said Thursday. South Africa said it had received notice that the U.S. had withdrawn from the International Partners Group, a bloc of rich countries that has pledged money for energy transitions in South Africa, Indonesia, Vietnam and Senegal. The bloc includes the European Union, the U.K., Germany, France, Italy, Canada, Japan, Norway and Denmark. The U.S. had declared, effective immediately, its withdrawal from the agreements in South Africa, Indonesia and Vietnam, said Chrispin Phiri, a spokesperson for the South African Foreign Ministry. The U.S. had not pledged money for Senegal's energy transition, although other members of the IPG did. It's another move by President Trump to take the U.S. out of global climate pacts after he signed an executive order in January to withdraw from the landmark Paris climate agreement that brings countries together to combat global warming. That agreement is aimed at limiting long-term global warming to 2.7 degrees Fahrenheit above pre-industrial levels or, failing that, keeping temperatures at least well below 3.6 degrees Fahrenheit above pre-industrial levels. The U.S. withdrawal from the IPG meant South Africa would lose more than $1 billion in future investment pledges from the U.S. to gradually decommission its polluting coal-fired power stations in favor of renewable energy, according to a statement from the office of South African President Cyril Ramaphosa. Phiri said grant projects in South Africa that were previously funded 'and in planning or implementation phases have been canceled.' The U.S. had canceled future funding for Indonesia's energy transition program that had been provided through the United States aid agency and the U.S. Department of Energy, said Fabby Tumiwa, executive director of the Institute for Essential Services Reform, a climate-focused nonprofit. Officials said the other rich countries were still part of the agreements and they would continue to provide support. 'South Africa remains steadfast in its commitment to achieving a just and equitable energy transition,' said Joanne Yawitch, the head of the Just Energy Transition Project Management Unit in South Africa. 'All other IPG partners remain firmly committed.' U.K. Climate Envoy Rachel Kyte, who was in South Africa for an energy conference, told the News24 outlet it was 'regrettable' that the U.S. had withdrawn. South Africa was the first country to sign up to a so-called just energy transition agreement at the United Nations climate conference in 2021. It said it had received $13.8 billion in pledges before the U.S. withdrawal. Indonesia and Vietnam signed their multibillion-dollar deals in 2022. The agreements are meant to recognize that some developing countries are reliant on coal to keep their economies going. They don't have the money or the green energy capacity to swiftly change and need to convert more gradually. South Africa, the most advanced economy in Africa, relies on coal for more than 80% of its electricity supply. Nearly all of Indonesia's energy needs are currently met by fossil fuels, with 60% coming from coal. South Africa, Indonesia and Vietnam are all among the world's top 20 emitters of greenhouse gases, according to ClimateWatch, which compiles data on climate change. Gumede writes for the Associated Press. AP writer Victoria Milko in Jakarta, Indonesia, contributed to this report.
