South Africa requires an initial funding of about R1.5 trillion to transition to a low carbon and climate resilient society for the five-year period 2023-2027, says Presidential Climate Commission (PCC) Commissioner Joanne Yawitch.
Addressing a hybrid Special Sitting on Understanding the contents of South Africa’s Just Energy Transition Investment Plan (JET-IP) on Thursday, Yawitch said achieving the JET IP outcomes is dependent on the scale and nature of financial support that South Africa can secure from the international community to complement domestic resources.
“At the 26th Conference of the Parties (COP) in 2021, a Just Energy Transition Partnership (JETP) was forged with France, Germany, United Kingdom, the European Union, and the United States (forming the International Partners Group [IPG]) in which the IPG undertook to mobilise US$8.5 billion (~ ZAR 128 billion) over five years to support South Africa’s Just Energy Transition.
“The initial IPG offer of US$8.5 billion is thus a catalytic contribution towards addressing the JET IP priorities,” she said.
The IPG funds will be primarily directed towards the electricity sector for the decommissioning of coal plants; the expansion and strengthening of the transmission grid and distribution infrastructure; supporting economic diversification in affected coal mining areas and the deployment of renewable energy.
The IPG US$8.5bilion offer comprises grants, concessional and commercial loans, and guarantee instruments, contributing to approximately 12% of South Africa’s JET IP funding needs for the period.
“South Africa’s dependence on fossil fuels gives rise to a range of climate, energy and transition risks, especially for affected workers, communities, businesses and exporters.
“However, embracing new economic opportunities in green technologies can drive industrial development and innovation, leading to a sustainable and resilient future with decent work, social inclusion and lower levels of poverty,” Yawitch said.
The JET IP represents the initial building blocks of managing South Africa’s Just Energy Transition and climate response, which will be a managed, phased, long-term process of economic, social, and environmental change.
It will involve multi-year, multi-sectoral, and multi-jurisdictional initiatives with many stakeholders, including significant capacity building to manage the scale of the Just Energy Transition.
“Implementation must be based on solid foundations for a sustained, focused, and visible effort across government, civil society, trade unions and the private sector that can adapt as needed over time. It will be grounded in existing South African institutions and systems and will adopt both local and global best practice,” Yawitch said.
The JET IP is premised on South Africa’s National Development Plan (NDP) 2030, with its focus on tackling the country’s systemic challenges of poverty, inequality, and unemployment.
It is in line with South Africa’s updated Nationally Determined Contribution (NDC) which was lodged with the United Nations Framework Convention on Climate Change (UNFCCC) prior to its 26th Conference of the Parties (COP 26) in Glasgow in November 2021, and South Africa’s long-term Low-Emissions Development Strategy (LEDS) submitted to the UNFCCC in 2020.
The NDC commits the country to reducing its emissions to within a range of 420-350 megatons carbon dioxide equivalent (MtCO2-eq) by 2030.