Advocacy groups are mounting pressure on government to be more transparent and inclusive in managing climate finance needed in transitioning South Africa to clean power alternatives.
This, after France, Germany, the UK and the US, along with the European Union, this week concluded a new long-term $8.5 billion (R150 billion) Just Energy Transition Partnership (JETP) to support SA’s decarbonisation efforts.
The partnership aims to accelerate the decarbonisation of SA’s economy to help it achieve the ambitious goals set out in the country’s updated Nationally Determined Contribution emissions goals.
The deal comes amid critical power shortages in South Africa, as power utility Eskom struggles to keep the lights on.
Amid the power crisis, SA is gradually moving from fossil fuels to alternative renewable energy sources. The country gets over 80% of its electricity from coal, although a number of these coal-fired power plants are reaching their end of life.
Climate finance discussions
Greenpeace Africa, members of the Fair Finance Coalition of Southern Africa (FFCSA), including 350Africa.org, African Climate Reality Project and Centre for Environmental Rights, are all calling for deeper transparency and inclusivity on climate finance discussions.
SA’s multibillion-rand partnership with international groups supports the closure of coal plants and investing in clean power alternatives.
The partnership is expected to prevent up to 1-1.5 gigatonnes of emissions over the next 20 years.
Nonetheless, advocacy groups say since the announcement of the deal last year at United Nations COP26, they have been frustrated by the lack of publicly available information on the partnership, claiming the president only divulged the details of the deal just two days before the ongoing COP27.
President Cyril Ramaphosa, during his speech at the COP27 conference in Egypt, outlined the scale and nature of investments needed to achieve decarbonisation goals over the next five years.
He called for bolder and innovative ways to finance just transition projects in developing countries, saying a “one-size-fits-all approach” will not work.
“We need to be bolder and more innovative in reducing project risk and crowd in private sector finance for climate and just transition projects. A one-size-fits-all approach to financing the transition that disregards African realties is neither just nor equitable and will not work,” Ramaphosa said.
South Africa has set up a R1.5 trillion investment plan for the next five years to assist the country's just transition to a greener economy.
Notable issues
Responding to Ramaphosa's presentation at COP27, the advocacy groups called for straightforwardness in handling the funds coming to support the transition to renewable energy.
FFCSA says: “On the surface, it is apparent that the type of financing the International Partner Group is offering is problematic; members of the FFCSA are concerned about the additional debt burden occasioned by the $8.5 billion offer, which primarily takes the form of loans.
“The FFCSA will launch a policy assessment of six African public finance institutions (PFIs) at COP27, revealing how transparent their policies are and whether they align with global climate ambitions.”
Alia Kajee, public finance campaigner for 350Africa.org, adds: “Civil society continues to demand that climate finance for South Africa does not result in additional debt. Civil society can support the JETP process if it is transparent, inclusive and committed to ensuring the people are at the centre of the just transition.”
“As the coalition, we are calling for climate finance that is fair, transparent and inclusive, without locking us into further debt. Given their developmental mandates, public finance institutions have an important role and obligation to finance a just and equitable society,” comments Amy Giliam Thorp, branch manager for the African Climate Reality Project.
“As the findings from our policy assessment show, PFIs in Southern Africa, like the AfDB, have much work to do to ensure transparent public finance that helps address the climate crisis.”
Greenpeace Africa climate and energy campaigner Thandile Chinyavanhu says: "The funding the South African government acquires through these partnerships must be managed with transparency.
“The rollout of the Just Energy Transition plan must prioritise public consultation; government must prioritise, ensuring the demands of local communities, and women in particular, are integrated and embedded in the plan. This will enable the plan to support government efforts to negotiate a larger grant proportion of finance in the transactions that respond to the Just Energy Transition Investment Plan.
“South Africa must remain resolute in achieving its climate commitments and holding other countries accountable to their own. A transition toward a low-carbon economy not only presents an opportunity to hit climate targets, but also provides a fast and affordable way to stabilise our ailing energy utility.”
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