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2 Mar 2023

Yolandi Groenewald, The Citizen (South Africa)

S. Africa: CSOs concerned over the JET-IP’s proposed funding, says it falls short of what is needed to support workers and communities affected by the transition from coal

‘There is hope’ for SA’s Just Energy Transition despite concerns about funding gap’ 1 March 2023.

South Africa’s daring plan to quit coal while sparking growth and keeping the lights on starred again in the State of the Nation Address (Sona) and the recent budget speeches, promising a solution to end crippling blackouts, while moving to a green economy. The plan has the potential to spark large-scale investment in South Africa and change the course of development, despite concerns about a funding gap in the plan. In his 2023 Sona, President Cyril Ramaphosa explained that around R1.5 trillion will be invested over the next five years to kickstart the country’s Just Energy Transition (JET). This investment is set to develop new frontiers such as renewable energy, green hydrogen, and electric vehicles as part of its Just Energy Transition Investment Plan (JET-IP). The start was a $8.5 billion (about R128 billion) pledge by rich nations at the Glasgow climate conference (COP26) two years ago.

At the time, the pledge made global headlines as a breakthrough for developing countries. But it’s just the start. Ramaphosa’s own Presidential Climate Commission (PCC) has pointed out that the deal – called the Just Energy Transition Plan (JETP) – was never meant to finance the whole transition – it is simply a catalyst to attract investment…Leanne Govindsamy, attorney at the Centre for Environmental Rights, said at a Fair Finance Coalition of Southern Africa media briefing that communities could not be a budget afterthought and that the coming investment was needed to help pull them forward. She expressed a real fear that JET-IP’s proposed funding falls far short of what is needed to support workers and communities affected by the transition away from coal…Eskom plans to shutter nine power stations by 2035, most of them in Mpumalanga. This will terminate 15GW of electricity and put 55 000 jobs at risk. But the real ingenuity of the JETP is to use the funds not to only transition, but to keep the country’s lights on. That is why Eskom – at least with De Ruyter at the helm – was at the centre of negotiations.

…Earth Life Africa’s Thabo Sibeko called for public finance institutions such as the Development Bank of Southern Africa, as well as local banks, to invest in local communities to ensure the “just” element in the JET plan is translated into real investment in communities. “Specifically in areas where communities are directly affected. This is an opportunity to invest and help in this energy crisis,” he said. Mpumalanga will need a further R60.4 billion for significant new investment and reskilling. By far the largest part – R24 billion – is for diversifying local communities. Mminele explained that the JET investments are embedded alongside the technical ones to make sure that workers and communities are not left behind.