05-05-2025
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.
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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.
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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.
