Progress, but too slow

There is growing impatience over the slow pace at which the South African government is moving to harness the $11.6- billion in concessional loans and grants pledged by several developed countries in support of the Just Energy Transition Investment Plan (JET-IP).

There is particular unhappiness that the relatively scarce, some say parsimonious, grant component has been directed, initially anyway, towards consultants rather than those communities and workers who are vulnerable to the negative effects of moving progressively away from coal.

These anxieties may not be fully justified, given that the framework for deploying the funds was not in place when the initial international partners of the European Union, France, Germany, the UK and the US announced their $8.5-billion support in 2021. Likewise, the pipeline of so-called just-transition initiatives, which relate mostly to skills-development and alternative-livelihood programmes, was wholly underdeveloped at the time.

Nevertheless, the frustration is only natural, given the fanfare surrounding the Glasgow COP announcement and subsequent news that the Netherlands and Denmark have since joined the initial International Partners Group (IPG), while Canada, Spain and Switzerland have made JET-IP-aligned commitments without formally joining the IPG.

Scepticism has also been further intensified largely because of the failure to fully implement or scale up the repowering and repurposing projects proposed for the decommissioned Komati power station. In some quarters, this scepticism has turned to cynicism partly because of a steady flow of misinformation from high-ranking politicians about the motives of the IPG in supporting the JET-IP and the Komati decommissioning. This, despite Komati not actually falling under the pledges made by the IPG, given that the funding was raised separately by Eskom from the World Bank.

Meanwhile, there has been a steady flow of reportage suggesting that the JET-IP’s international backers are also growing wary, particularly given that South Africa is likely to slow the decommissioning of the very coal plants that funding from these countries was meant to ensure and potentially accelerate.

During a recent briefing, the Just Energy Transition project management unit, located within the Presidency, sought to offer assurances that the programme remained intact, continued to receive international support, and was moving towards full implementation.

The unit pointed to progress being made to finalise the mechanisms through which off-balance-sheet solutions will be introduced for grid-related investments. It insisted, too, that Eskom would be ready with its submission by October to secure funds for Camden, Hendrina and Grootvlei under the Accelerated Coal Transition Investment Plan, despite decommissioning delays, and announced a JET Funding Platform to facilitate matchmaking between grant funders and beneficiaries.

It also indicated that there would be specific champions in place by April for all the portfolios being supported under the JET-IP, including new energy vehicles, green hydrogen, skills development, municipalities, and support for just energy transition initiatives in the coal-reliant Mpumalanga province.

There is no question that South Africa’s national finances have benefited from the policy-linked loans already extended by some IPG members. Nevertheless, without visible projects the prevailing distrust will continue and grow.