South Africa takes one step closer to a Just Transition deal
South Africa’s cabinet has approved the $8.5 billion (R155 billion) plan to help the country transition away from fossil fuels.
The deal will formally be unveiled at the COP27 conference in Egypt next month. It was at the previous COP in Scotland where a group of rich countries announced the package. Negotiations on how the money will be spent have proven fraught.
The package is not a handout. It is made up of a combination of concessional loans and grants. South Africa’s Presidential Climate Finance Task Team has had to ensure that the pledges from rich countries don’t worsen the country’s debt problem.
Much of the funds will be directed to power utility Eskom for the decommissioning of old and harmful coal plants. The sites will be repurposed to provide renewable energy to the grid.
The Just Economic Transition Partnership funding will support three sectors. In addition to the much-needed decarbonisation of the electricity network, investments will also be made for the development of electric vehicles and green hydrogen.
Deep pockets needed for Just Transition
This funding model is the first of its kind in the world. If successful, it provides a framework for other developing countries to move towards greener economies. And so, better chances to meet their climate goals. But, the opposite is also true.
Meanwhile, environmental groups and civil society are absent from the negotiating table. They say government is not being transparent and by not consulting with them puts any kind of Just Transition in danger.
But, broader society will eventually get a say. “The investment plan, once launched at COP27, will be released for public comment this year. We are urging that you would look at it, understand it, and see how it lays out the vision for ways we want to support the transition for these three sectors,” said environmental minister Barbara Creecy.
South Africa is going to have to keep raising money. Between now and 2050, it is estimated that the country needs $250 billion to realise the transition away from coal, according to Stellenbosch University research.