South Africa’s Just Energy Transition Partnership has made significant progress since its launch at COP26 in November 2022, with the number of development partners now supporting the initiative and Denmark and the Netherlands joining the International Partners Group. A total of $11.6 billion have been pledged to the partnership, including $9.3 billion from the International Partners Group.
Reskilling and economic diversification projects have started in Mpumalanga, and energy policy reforms are taking place to accelerate investment in renewable energy, electric vehicles, green hydrogen, and transmission finance. This has created a significant number of jobs.
South Africa’s ongoing electricity supply crisis has resulted in the government deciding to re-assess the schedules for decommissioning coal power plants, to manage energy security priorities. To this end, the government is front-loading work on the repowering and repurposing of the retiring power plants and community development initiatives at these sites.
The Implementation Plan (IP), approved by the South African Cabinet on 15 November 2023, summarises the current status of financing, updates on progress and the state of play in each portfolio, sets up collaborative structures for portfolio planning and management, and prioritises specific programmes.
Funders are supporting women to obtain skills in renewable energy in technical and vocational colleges in Mpumalanga, and the funding platform is being established to match grants and investments to projects. In addition, the South African Government is continuing its energy reforms, with the Electricity Regulation Act Amendment Bill at committee stage in Parliament, and the removal of the licensing threshold for generation facilities leading to a 66GW pipeline of renewable energy projects.
The Kingdom of the Netherlands has committed €50 million towards a green hydrogen blended finance fund, while the South African Cabinet approved the Electric Vehicles White Paper in November 2023. Funders are also supporting small to medium-sized enterprise (SME) financing in Mpumalanga, and the European Investment Bank (EIB) has provided a €200 million loan for the Development Bank of South Africa to on-lend for onshore wind and solar renewable energy projects.
The inclusion of the Kingdom of the Netherlands and the Kingdom of Denmark in the International Partners Group, as well as the 57% increase in grant offers from the original members of the group, reflects confidence in South Africa’s Just Energy Transition Partnership and its ability to support the country’s implementation of the Paris Agreement.
Looking ahead, South Africa’s energy challenges may lead to a delay in planned decommissioning of coal-fired power plants, but work will focus on the repurposing, repowering and community development at these sites. The next 12 months will see investment in solutions to accelerate the expansion of the transmission grid, as well as policies and incentives to grow electric vehicle manufacturing, green hydrogen industry and infrastructure, and skills for the energy transition.
The South African government and the International Partners Group are committed to working together to achieve the objectives set out in the Political Declaration of 2021, the Investment Plan of 2022, and the Implementation Plan of 2023.
Derick is an experienced reporter having held multiple senior roles for large publishers across Europe. Specialist subjects include small business and financial emerging markets.